U.S. shares are on the cusp of a really spectacular breakout to all-time highs, however are nonetheless lacking one key ingredient. They want assist in the type of a semiconductors ($DJUSSC) breakout of its personal. When the DJUSSC reached its all-time excessive on June 20, 2024, one 12 months in the past, a nasty bearish engulfing candle printed on extraordinarily heavy quantity, I wrote an article, “The Semiconductors Have Topped; Look Elsewhere for Alternatives”. Merely put, it was patrons’ exhaustion”. I seemed for a 20% drop within the index, offering this chart on the time:
There’s now been a prolonged interval of sideways consolidation on the semiconductors as you possibly can see from this up to date chart as that 20% drop instantly occurred:
Semiconductor management has been held firmly in verify by the overhead value resistance slightly below 22000. Till that resistance is cleared, the QQQ has a lid on it.
Let’s take into account that the QQQ, an ETF that tracks the NASDAQ 100 index, may be damaged down into its high 2 business teams, as follows:
- Semiconductors ($DJUSSC): 21.65%
- Software program ($DJUSSW): 19.11%
Greater than 40% of the QQQ is comprised of semiconductors and software program. This is what the longer-term, 5-year software program chart appears like:
Software program’s relative power is highly effective and we have lately seen an absolute value breakout – an superior combo. On a 5-year weekly chart of semis, it is fairly obvious that when the semiconductors escape, they carry the NASDAQ 100 on their shoulders larger and we’re near a breakout now:
We simply noticed a relative power breakout on the DJUSSC, there’s just one factor lacking – that absolute breakout and it is coming pretty quickly, in my view.
Market Outlook
A giant a part of what occurs over the following 6-12 months shall be extremely depending on the 2 business teams above. There are over 100 business teams and this can be oversimplifying shares a bit, however make no mistake about it. Increased progress prospects and decrease rates of interest can lead to flying PE ratios and these two teams are dwelling to corporations that may broaden their companies very quickly.
Market Manipulation
I’ve mentioned the function of market makers and their manipulation of the inventory market many instances over the previous a number of years and there is no doubt in my thoughts we had been simply uncovered to a different large dose of it within the first half of 2025. At EarningsBeats.com, nonetheless, we have grow to be consultants at recognizing it and pointing it out. I mentioned the significance of being in money again in late January and in February earlier than the large Wall Avenue ripoff began and I additionally wrote in regards to the significance of getting again in early. Keep in mind my article within the second week of April, “The Backside is Right here or Quickly Approaching”? These are real-time articles, people. You have to see the tops and bottoms earlier than they happen. It does little good to speak about it now. We do not get a “do over.”
Or can we?
What do I imply by that? Nicely, we’ll have a lot extra probabilities to identify tops and bottoms sooner or later, however it’s worthwhile to study from this 12 months’s errors RIGHT NOW. Do not let these big-money, Wall Avenue crooks do it to you once more. We have now one MASSIVE benefit on our facet vs. these huge Wall Avenue companies. We are able to enter and exit shares in seconds. It takes them days and weeks.
If you wish to be better-positioned to see this nonsense AHEAD OF TIME the following time it comes round, I would recommend that you just be part of me on Saturday, June twenty eighth at 10:00am ET for a 100% free occasion, “Buying and selling The Fact: How Market Manipulation Creates Alternative”. CLICK HERE to register and study extra in regards to the occasion! This can be a MUST-ATTEND occasion and seating is restricted. Make sure to save your seat and learn to shield your hard-earned cash for the remainder of your monetary future!
Completely satisfied buying and selling!
Tom
Tom Bowley is the Chief Market Strategist of EarningsBeats.com, an organization offering a analysis and academic platform for each funding professionals and particular person buyers. Tom writes a complete Each day Market Report (DMR), offering steerage to EB.com members day-after-day that the inventory market is open. Tom has contributed technical experience right here at StockCharts.com since 2006 and has a elementary background in public accounting as properly, mixing a singular talent set to strategy the U.S. inventory market.
