Test, Downside, or Reversal

Pre-market trading in the SOXX (as of 7:08 a.m., EST), looks different from other recent downside action.

Typically, in the overnight session, bids come in and launch the SOXX upward; yet another bear trap move.

This time, so far, it’s not happening.

There may be a change of character.

If that’s true, and the SOXX is about to continue its downside action, one of the following is likely.

1. There’s a weak retrace to either 23.6%, or 38.2%
2. A small blip higher in the early session, then reversal, new daily low
3. An ‘inside’ narrow range day

Of course, none of the above could be the result as well.

Currently, the SOXX is trading at 282.92, slightly above yesterday’s close.

Note the Fed minutes release at 2:00 p.m., EST.

Stay Tuned

Charts by StockCharts

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The Danger Point®, trade mark: No. 6,505,279