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Semiconductors, SMH Should Continue Higher


The energy inventory numbers were just released, showing big draws in gasoline and distillates, and a moderate build in crude... So far, crude oil prices are responding positively to the data... nearby crude is up $0.76 at 59.00... up about $0.50 since the data were released... We are watching key resistance at $59/10/20...

In the meantime, let's have a look at the BIG picture of the SMH...

Today's up-gap and spike to 35.64 hurdled momentarily the major Jan-Nov resistance line at 35.50. Right now, neither my near nor intermediate-term work argue that the uptrend should stop in its tracks. Other than a stall for an hour or three, I expect the SMH to continue higher. Let's keep in mind that AMAT earnings come out today after the close, and that particular chart pattern has huge upside potential, which could be triggered in reaction to AMAT's results. Such a scenario would be bullish for the SMH, if for no other reason than AMAT equals 14% of the index. My optimal next upside target window is 36-38.

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