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Semiconductors bottomed and turned up before the broad markets in 2002 and 2008. They did the opposite in 2000 and 2007, as they started reflecting weakness before the broad market turned down.
Are Semiconductors the holy grain of investing? Don’t think so! They have been a decent leading indicator at fairly important Tops & Bottoms over the past 14-years though.
The Sox index has done well over the past five years. Even though it has rallied strongly, it is just now reaching its 38% Fibonacci retracement level, based upon the 2000 highs and the 2009 lows.
So far the Semiconductor index is NOT diverging against the S&P 500 like it did in 2000 and 2007. I do believe it is worth keeping a close eye on this leading sector to see how it handles this key Fib level and resistance channel at (3) going forward.