Semi's Have More Downside

Big gap down this morning has pressed the Semiconductor HLDRs (AMEX: SMH) below both its rising 200 DMA and its 15-month support line (36.40/30), which could trigger potentially significant technical damage to the intermediate-term chart structure -- if the weakness sticks for the remainder of today's session. Having said that, however, my pattern and momentum work (hourly and daily) are encouraging me to remain short even if the SMH manages to grind its way up to 37.00/20 again, largely because my primary scenario has morphed into a bearish one. The Sept-Oct upside failures at 39.00/30 and the subsequent weakens into today's low near 36.00 represents the downside continuation of the July-Aug decline from 41.41 to 34.99. If my work proves accurate, then the SMH is heading for 34.00-33.00 before this decline ends.