anEck Semiconductor ETF (SMH)

[royg1927]

Looks like the INTC favorable revenue forecast which apparently gave the whole market a shot is being sold after the initial positive reaction. My take is that the chip business and especially the chip equipment business have poor fundamental outlooks and their stocks are quite vulnerable.

It is hard not to translate that into potential weakness in the SOX and SMH. I do not expect straight down from right here, but rather a series of halting stair steps that can be tradeable, mostly on the short side.

Today's possible G + C, if it develops into full bloom, could be a signal to traders everywhere to take profits. Already, it is difficult to see anything less than a run of longs ducking for cover next week.

The current SMH short position is looking rather solid, the TA being in sync (my own take) with the above outlook.