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Will the Semiconductors Hold or Fold?
The Semiconductors will likely have a considerable impact on the
Nasdaq in the weeks ahead. Right now the Semiconductor Holders (SMH) have
a major support area near 32 which corresponds to their 23.6% Extension Level
(calculated from the January high to the September low) and upward sloping trend
line (solid brown line) originating from the September low. If the SMH's
break solidly below the 32 level this will likely lead to an eventual retest of
the September low near 28 and have an adverse affect on the Nasdaq.
Meanwhile if the SMH's can hold support around 32 and begin to rally they still
have an upside resistance area to contend with near 35 which is where they have
stalled out twice before during the past month (points A and B). Also you
will notice the 35 level is close to the SMH's 38.2% Extension
Level. 
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