Semi Dilemma

On Monday, the Nasdaq lapped lower and continued
lower in a choppy fashion. This action has it closing poorly.

Once again, the recent highs, just above the
50-day moving average remain possible resistance to the upside. The
recent lows, circa 1950 remain a possible target to the downside.

 

The S&P also sold
off to close poorly. 

 

So what do we do? Again, not too much has
changed. The market remains soft after recently bumping up against a
resistance level. This action also happened to corresponded with
market timing sell signals. Therefore, the short side appears to
remain the logical play. And, once again, the choppy, late-summer type
trading  (the lightest volume of the year for the Naz and second
lightest for the NYSE) suggests that we should not bet the farm. 

Tonight’s Dilemma

Tonight (Monday), the only thing that seems to be
set up are the semiconductors. Many of these stocks, and the sector
itself,  have formed Pullbacks/Bow Tie buys. As you know, I’ve
been somewhat bearish as of late. In fact, ironically, the two
potential shorts mentioned on Friday were semis. So what will I do? I
think I’m willing to sit this one out. Why? The overall market still
looks vulnerable. Volume has been extremely light–creating choppy
trading. And, Cisco (CSCO)
(who uses semiconductors)  is scheduled to announce earnings
after the close on Tuesday.

Below are some examples of what I’m seeing
tonight.

The SOX ($SOX.X)
is set up as a Bow Tie.

 

RF Micro Devices (RFMD),
which recently rallied out of a Bow Tie (a), is now setting up as a
pullback.

 

Best of luck with
your trading on Tuesday!

Dave Landry

sentivetradingco@prodigy.net

P.S. Reminder: Protective stops on
every trade!

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