Strong leadership is attempting to break out to new all-time highs. If it is successful, it sends a positive message to the broad markets!
The chart on the left compares Semiconductors (SMH) to the S&P 500 over the past 12-years. Since the 2009 lows, the ratio has been moving up, which means the SMH has been stronger than the broad markets.
The chart on the right reflects that SMH has remained inside of a bullish rising channel (1) over the past 11-years. SMH tested the bottom of the channel in March as support, and it held!
The rally off support has SMH testing its February highs near the top of its rising channel at (2).
If this strong leader succeeds in breaking out at (2), it continues to send a bullish message to the broad markets!