Elliott Wave Analysis of SPDR S&P Semiconductor ETF (XSD)

Wave Pattern Traders Team Wave Pattern Traders

If you are an active trader, then you may well have been noticing the recent strength on the semiconductor stocks, particularly stocks like Broadcom (AVGO) Intel (INTC) and Microsoft (MSFT). Although there are a few more semiconductor stocks that have shown strength since the Dec 2018 low, based on the weighting, the stocks listed are the more important stocks to follow in my opinion.

Taking a look at the ETF called XSD, it's pretty much the SOX in disguise, I favor the frenzy and euphoria that we are seeing now, is likely a 5th wave of a large impulse wave from the 2009 low. It's common to see Technology stocks being bid when traders and investors are chasing the market. We saw that into the Oct 2018 high as the FAANG stocks were being bid up. Today it's not so much the FAANG stocks, but the semiconductor stocks, which is very reminiscent to what was seen into the 2000 tech bubble top.

Crossing referencing XSD to the SOX, whilst the SOX remains above 1477 a bit more upside could still be seen to end wave [5] of wave 5, that is approximately the 82.00 - 80.00 area on XSD. However until we see an obvious sign of a reversal on the SOX and XSD, then for now, I would respect the recent strength on the SOX/XSD above 1477/82.00 respectively, although I am actively looking for signs that the move from the Dec 2018 has finally burned out. When it turns and reverses, I suspect we see a swift and fast decline as today's buyers become tomorrows sellers.

SOX

XSD

Author

Wave Pattern Traders Team

Wave Pattern Traders

Specialists in the use of Elliott Wave, Market Analysis, Fractals & Fibonacci.

GBP/USD bounces off lows, back above 1.3200

After bottoming out near 1.3160, GBP/USD manages to regain a bit of shine and reclaim the 1.3200 mark and beyond at the end of the week. Stronger-than-expected UK Retail Sales data seem to be helping the British Pound limit its losses, while the chaotic UK political environment keeps the bulls at bay for now.

EUR/USD looks consolidative around 1.1460

EUR/USD stages a modest rebound after slipping to a three-month low below 1.1420 at the end of the week. That said, the pair now looks to consolidate humble gains just above 1.1460 despite growing uncertainty surrounding the next round of US-Iran negotiations, which keeps the US Dollar’s downside contained.

Gold slips back to six-day lows, targets $4,100

Gold retreats for the third consecutive day on Friday, eroding gains seen in the first half of the week and approaching the key $4,100 mark per troy ounce. Indeed, the precious metal continues to face headwinds from the Fed's hawkish stance and renewed uncertainty surrounding the next round of US-Iran negotiations.

Breaking: Iran closes the Strait of Hormuz amid ceasefire deal violation

Iran says it is closing the Strait of Hormuz after accusing the United States (US) and Israel of violating the ceasefire. According to Iran, the decision came over the continued Israeli strikes in Lebanon. The Iranian Revolutionary Guard Corps Navy issued a warning to all vessels: "Do not approach the Strait of Hormuz; otherwise, your security will be jeopardized."

The Iran war didn't break the US economy, but what happens next?

Nearly four months after the start of the Iran war, the US economy remains remarkably resilient. While the conflict initially triggered a severe disruption to global energy markets and a sharp rise in Oil prices, recent diplomatic progress between Washington and Tehran has eased concerns about a prolonged supply shock.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.