SOX (semiconductor index) technical outlook

The SOX index is one of the core parts of the NDX and therefore a good indicator in evaluating the overall picture. The first big wave down from July 2007 to March 2009 had a magnitude of 260 points. The current wave has a magnitude of 200 points so far. It is not necessary that the length of waves are equal – just to put it into proportion. The pattern I call personally a head and shoulder, although it is not in classic terms, gives a target of 230 we were at 223 so far. The final fact is the October 2002 low was 209. MY bottom line is that we need a final dive into the 210/20 area before the bigger counter-trend rally can start. The chart above is a weekly one and the daily confirms that we need 3 consecutive lower closes below 230 on a daily basis to complete this leg. Again, all adds up to the same conclusion – so be patient and do not rush in if you want to buy.


~ by behindthematrix on October 17, 2008.

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