Semis & NASDAQ 100 at Odds

On Tuesday, the Semiconductor Index as well as its ETF counterparts hit new lows for 2015. This is important for two main reasons. First, historically, as go the semis, so goes the NASDAQ. And as goes the NASDAQ, so goes the broad stock market. It is an intermediate to long-term concern that the semis are more than just struggling. Bull moves typically do not continue without support from the semis.

sox

Below you can see the NASDAQ 100 which is anything but struggling right now. While it has pulled back to the top of the previous trading range from April through June, the index hasn’t done anything wrong technically to warrant specific concern. As you know, however, I have been concerned about the stock market in general for several months.

qqq

This divergence between the semis and the NASDAQ 100 is not likely to continue. The odds favor the NASDAQ 100 losing its grip, at least in the short-term, and following the semis lower.

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