Over the years, we have consistently pointed out the importance of stock market leadership.
The premise is simple. If a sector is out-performing, find strong stocks within that sector. If we are in a bull market, follow out-performing sectors (leaders) for clues about the stock market’s health.
One such sector is Semiconductors. Below is a “monthly” chart of the $SMH etf.
At first glance, we can see how the turn lower into 2022 lead the market lower and how the turn higher into 2023 has lead the market higher.
Note that the long-term trend is still higher as the blue trend line support at (1) held firm. Equally important, $SMH put in a bullish reversal off of that support which lead the Semiconductors (and the market) higher.
Currently, $SMH is testing its prior highs at (2).
“Breakout or Double Top?” ‘Holy cow,’ it sure looks important what this market leader does next!
This article was first published for See It Markets.com. To see the original post CLICK HERE.
