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Advanced Technical Analysis - SOX

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Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.

Summary:

The SOX has bounced from what appears to be a good bottom at the 390 level and has now completed a full and clean impulse wave up from that 390 level. What this means is that, because short term momentum is not confirming the latest peak, a pullback to lower Fibonacci support could occur in the next session or two that holds above 400 before resuming at least one more impulse wave of similar degree toward upper Fibonacci resistance in the SOX 427-450 range.

For now, there are multiple interpretations of the intermediate term (multi-week/month) trend. Some are bullish, some are quite bearish. We cannot know definitively today if the 427-450 range will act as stiff resistance and turn prices back down to below the 390 level. The only thing we can be confident about is that at least one more impulse wave up should unfold in the next week or two that carries to that target range. How prices get there (form) and to where in that range will provide valuable evidence to help us understand if the intermediate term trend is highly bearish (and 340-360 are going to be seen in the next few months) or if the 390 bottom was a major pivot for the SOX and the index is poised to exceed 450 meaningfully.

A bounce could take place following a pullback in prices to lower support at 400-408 in the next few sessions with a move below 394 providing reason to re-evaluate the scenario. We will then have to asses the technical data on any move toward 427-450 to help confirm either the larger bearish trend or a potentially bullish one.

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No positions in stocks mentioned.

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