Semiconductors' Market Leadership Reaches Important Trendline Support
Chris Kimble | Sep 28, 2022 10:44AM ET
Today we revisit an incredibly important stock market ratio: The VanEck Semiconductor ETF (NASDAQ:SMH) versus the SPDR S&P 500 (NYSE:SPY).
This ratio highlights how an important tech leadership group performs versus the broad market. And considering that tech stocks have led the market higher over the past 13 years, well, it’s important.
We’ve highlighted this ratio several times this year, following its breakdown through price support and its latest test of resistance (before falling again).
Below is a weekly chart highlighting a bearish head and shoulders pattern breakdown formed as a double top at the Dotcom highs. Yikes!
The $SMH to $SPY ratio is testing its long-term trend line support at (1).
The chart has a heavy feel to it, so the bulls are going to need some super strength for the save. Their opportunity is now, and they must begin to see buying.
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