Semiconductors rallied this week with Nvidia ripping almost 8%.
This all comes as journalists on basic cable tell your parents that the Nasdaq is in a correction.
You see how this works?
Here's Nvidia finding support at the same key extension levels where the buyers stepped up in the Fall:
As I've said a whole bunch of times, if the Semiconductor Index completes this massive top relative to the S&P500, then chances are that the bull market is cancelled.
With Semi's rallying this week, despite the selling pressure in other areas of the market, that alpha put the Semiconductor Index back above all that support, invalidating any bearish implications that may have occurred earlier in March:
If Semi's do actually break, then I believe there is a bigger structural problem in the market, particularly in U.S. equities.
Global equities continue to act well, pointing more towards a rotation, rather than a full blown credit event. See here.
Look at the second largest U.S. Semiconductor - Broadcom.
Prices are back down to all that former resistance from 2024, and so far it's turning into support:
Look for a break in $AVGO to new lows, to confirm that any selling pressure in Semi's is still not over.
Based on the weight-of-the-evidence, my suspicion is that these levels hold and the mean reversion is already underway.
But whether that's the case or not, there are still plenty of opportunities to make money in this market.
Gold stocks are hitting new highs. European stocks are hitting new highs. Chinese stocks are hitting new highs. And there are U.S. stocks that are bucking the trend and continuing to rally as well.
Our LIVE Conference Call for Premium Members of ASC Research is this Monday.
We'll be walking through exactly which stocks we want to own, which names we want to avoid, and the best strategies for this environment as we enter Q2.
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