Did you hear about the massive top in Semiconductors?
Everyone is talking about it on the internets. So it must be true.
Seems the easy call here to make is to say "that was it". The Semiconductor story and the bull market as we know it is over...'
One of the things they teach you in the first week of Technical Analysis kindergarten is that infamous Head & Shoulders top.
The reason this is so popular is because it is "easy" to recognize. You have a left "shoulder", followed by a higher high (head), and completed with a lower high, forming the "right shoulder".
Once the "neckline", represented by these gray shaded lines above, gets broken, the whole house of cards collapses.
Or so we're taught.
But here's the thing.
Asset prices trend. Massive topping formations are much more rare.
In most cases, particularly during bull markets, these sorts of formations tend to resolve higher, and these "massive tops" are just figments of traders' imaginations.
This could very well be a historic top and selling opportunity in Semiconductors.
It could.
And that's the beauty of Technical Analysis. It's not that this HAS to be a top in Semiconductors just because a pattern might appear a certain way.
It could be. And you have the right to interpret it that way and bet accordingly.
So is that the bet that you're making?
Do these massive tops complete and the whole thing is over?
Or is this just a normal consolidation, within an ongoing secular uptrend in a leading sector?
How are you playing that conclusion?
These are the things I like to think about and hope it adds value to your thought process as well.
It's incredibly therapeutic for me to write all these thoughts down, and for that I'm very grateful for your support.
The purpose of our Breakout Multiplier strategy is to look for home run trades. We're focused more on how big our winners are, and less so on our winning percentage.
But so far, both of those things are working beautifully.
Below is a snapshot of some of our recent positions in Breakout Multiplier.
(Click to enlarge)
Six of the first seven Breakout Multiplier options trades we put on were doubles. And most of them did so within a week.
This is the power of Breakout Multiplier. You combine these ideas with our Rangefinder software, you have a deadly combination…
