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Now Semis Are On The Cusp Of Breaking Lower

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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1/19/2022

STOCKS – AAPL, AMZN, NXPI, NVDA

MACRO – SPY, SMH

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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL

Another day, another sharp decline in the stock market. It was a dull day until around 3 PM when the flood gates opened. That was when the Intraday bear flag broke, and everything caved.

S&P 500 (SPY)

In the meantime, the S&P 500 broke the lower uptrend and bound of the Diamond pattern we have been tracking. The index closed right at the December 20 lows. My expectations are for that low to break and the index to drop back to the October lows around 4,360. There is very little support once the index breaks 4,500, so a decline could happen quickly.

Semis (SMH)

The SMH had a significant breakdown today, falling below an uptrend that started last year. Imagine if this turns out to be a giant throw-over of a rising wedge pattern. That would be incredible; $250 would merely be a support level on the way much lower.

Nvidia (NVDA)

Nvidia dropped by 3% and is now 27% off its highs, and that gap at $231 is screaming to get filled. That’s about another 8% away from the close of $250.

NXP Semi (NXPI)

I can’t remember, but I think I recently mentioned that NXPI was breaking down and out of a falling wedge. There is a gap at $200 that needs to fill.

Apple (AAPL)

It looks like Apple has formed that Head And Shoulders pattern I mentioned over the weekend. It is all but confirmed at this point, but we need follow-through lower to make sure. The low $150’s seems like the next stop.

Amazon (AMZN)

I have some bad news for Amazon because the stock just broke a major trend line on a closing basis. So many people probably think the stock has formed a bullish flag pattern; it has not. Notice that the channel portion of the “FLAG” is sloping higher, and a flag pattern slopes lower. So the pattern that has formed is a reversal pattern and suggests that Amazon drops. The stock probably breaks the $3,000 mark very soon.

Take care.

Mike

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