SOX Loses The Uptrend

Technically the Semiconductor Index broke the uptrend line yesterday, but today the break was confirmed with a convincing move down. The SOX is often a leading indicator for Nasdaq movement and today was no exception. Prior to the BIDU downgrade that formed the catalyst for todays dive, the SOX was showing weakness and put in a lower high on the 15m intraday charts today while the indices were putting in higher highs. I always have a chart of the SOX up on my screen as I like to get confirmation from the SOX whenever possible for NDX moves. I do not trade off the SOX movement, but use it on days like today as my canary in the coal mine. Take a look at the intraday 15m chart and you will see that there was weakness in the SOX today prior to bigger move down.

SOX Index Daily Chart



SOX 5 Day 15m Chart (note lower highs circled)