Semiconductor ETF Has Failed to Break Out
One of the biggest stories in the last month has been the breakout in the 
Nasdaq-100. But the Market Vectors Semiconductor ETF has failed to join the breakout.
It’s not a surprise because chips are economically sensitive and struggle when manufacturing slows. That’s happened now.
SMH’s lack of breakout shows weak relative strength and fundamentals. That could give bears more of a reason to expect downside if selling spreads in the broader market.
It also creates a potential risk-management zone for traders taking bearish positions.
Finally, the relative weakness in chips focuses attention on Nasdaq stocks that have actually broken out – like
software and 
e-commerce. Traders may want to expect more strength in those groups.
SMH might not be a short yet, and it might still break out if the S&P 500 holds 3,000. But if the opposite happens and volatility picks back up in July, this could be a corner of technology where the bears will be more active.
Nasdaq-100. But the Market Vectors Semiconductor ETF has failed to join the breakout. It’s not a surprise because chips are economically sensitive and struggle when manufacturing slows. That’s happened now.
SMH’s lack of breakout shows weak relative strength and fundamentals. That could give bears more of a reason to expect downside if selling spreads in the broader market.
It also creates a potential risk-management zone for traders taking bearish positions.
Finally, the relative weakness in chips focuses attention on Nasdaq stocks that have actually broken out – like
software and e-commerce. Traders may want to expect more strength in those groups.SMH might not be a short yet, and it might still break out if the S&P 500 holds 3,000. But if the opposite happens and volatility picks back up in July, this could be a corner of technology where the bears will be more active.
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