Higher or Lower?
ON Semiconductor, is scheduled to report after-hours on Monday, link here.
If the overall sector (SOXX) is still continuing an upside squeeze, then ON could break higher on the earnings (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Similar to the SOXX?
We just saw what happened to the SOXX when volume increased at support, link here.
From that update:
“Instead of volume contracting on the test (sellers backing away), it has increased (blue arrow).”
Next session, SOXX broke lower and kept on going.
Now, Jabil closed near support; volume increased 43.2% over the prior session.
It’s also possible, price action is posting a trading channel Fibonacci 13-Days wide (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
This, Is The Spot
Well, ladies and gentlemen, we’re at the spot where any move, in any direction, may set the stage for what’s to come.
Last Friday, the SOXX penetrated support, then rebounded in the initial stages of a Wyckoff spring.
Today, price action came back to test.
This type of behavior is bullish, suggesting a move higher; however, there’s a problem.
Instead of volume contracting on the test (sellers backing away), it has increased (blue arrow).
For the test to indicate probability of complete, Monday’s open needs to be higher, with a new daily high (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Targeting Resistance?
June 5th was a 4-pt. downward gap open, then lower close; down 13.56-pts, or -6.20%.
Price action may be targeting this area in an attempt to fill the gap (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Is Today, The Day?
There’s a lot going on, in the chart of ON, at left.
What we’re looking for here, is either a new daily low, or continuation higher into established resistance (not advice, not a recommendation).
Pre-market in the SOXX is lower (as of 8:55 a.m., EST).
Recall, yesterday’s post had it at 13-days since all-time highs for the SOXX.
Looking at the chart of ON, yesterday was Fibonacci Day 8, from the recent lows.
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The Danger Point®, trade mark: No. 6,505,279
Close To Resistance
Today was Fibonacci Day 13, from the SOXX, all-time highs.
So, we’ll see if the SOXX posts and closes higher or if today was it (not advice, not a recommendation).
From an individual vehicle standpoint, ON Semiconductor is the focus.
The market itself has said it does not like recent acquisition plans. A massive down move, heavy volume (now retracing), may be hiding opportunity for something larger.
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The Danger Point®, trade mark: No. 6,505,279
Ease of Movement
Semiconductors weren’t the only ones hit hard last Thursday; suppliers were as well.
The table at left, shows the top eight. All, deeply in the red as of the last close.
For today’s discussion, we’re looking at Entegris, ENTG.
The last update was here.
Since then, ENTG has posted a false breakout, or a Wyckoff Up-Thrust (not advice, not a recommendation).
Entegris ENTG, Daily
As in the case of Amphenol, yesterday, there’s a well-defined risk level, if short; Thursday’s high at 166.76 (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Weakest of Three
Semiconductors weren’t the only ones going over the edge yesterday.
Engineering & Construction was as well (not advice, not a recommendation).
Stories like this, may be a clue.
Of the three largest caps, PWR, FIX and EME, the weakest price action (at this time) is Emcor Group Inc., EME.
Emcor Group, EME, Daily
Yesterday, was a breakdown through a long term trendline (dashed blue line).
‘Normal’ market behavior, like discussed with the semi’s (yesterday), is to come back for a test (not advice, not a recommendation).
If that test happens, there’s no required timeframe.
Price action itself will let us know.
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The Danger Point®, trade mark: No. 6,505,279
Testing The Break
For those already short, it was a good day.
For those long or waiting to go long, it was not so good.
However, even as this post is being created, the SOXX is retracing higher in the after-hours, testing its trend-line break (not advice, not a recommendation).
Today’s action saw the lower wedge trend-line broken to the downside on increased volume.
Note: The Nasdaq (QQQ) has not broken its lower line but stopped right at the wedge boundary.
Semiconductors SOXX, Daily
While testing of the break is ‘normal’, anything can happen.
If the breakdown stays in-effect, the measured move target is around 487 (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Next Leg Higher
As incredible as it may seem, looking the SOXX and Qualcomm in particular, a rally may be the next significant move (not advice, not a recommendation).
Of course, some of the semi’s are completely imploding , like ON, today.
Making acquisitions at the top. You can’t make this stuff up. Didn’t Peabody Energy try that one … then, went bankrupt … almost twice. 🙂
Back to the chart.
Qualcomm QCOM, Daily
Volatility has exploded over the last several months. The range has ben compressed to show the action.
If the overall SOXX was going to collapse, today would have been a good day.
However, as we see with QCOM, it penetrated support and stopped dead; a Wyckoff spring set-up (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
