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 ($DJUSSC) breakout of its personal. When the DJUSSC reached its all-time excessive on June 20, 2024, one 12 months in the past, a nasty bearish engulfing candle printed on extraordinarily heavy quantity, I wrote an article, “The Semiconductors Have Topped; Look Elsewhere for Alternatives”. Merely put, it was consumers’ exhaustion”. I regarded for a 20% drop within the index, offering this chart on the time:
There’s now been a prolonged interval of sideways consolidation on the semiconductors as you’ll be able to see from this up to date chart as that 20% drop instantly occurred:
Semiconductor management has been held firmly in examine by the overhead value resistance slightly below 22000. Till that resistance is cleared, the QQQ has a lid on it.
Let’s remember that the QQQ, an ETF that tracks the NASDAQ 100 index, may be damaged down into its prime 2 trade teams, as follows:
- Semiconductors ($DJUSSC): 21.65%
- Software program ($DJUSSW): 19.11%
Greater than 40% of the QQQ is comprised of semiconductors and software program. Here is what the longer-term, 5-year software program chart seems to be like:
Software program’s relative energy is highly effective and we have just 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 get away, they carry the NASDAQ 100 on their shoulders greater and we’re near a breakout now:
We simply noticed a relative energy breakout on the DJUSSC, there’s just one factor lacking – that absolute breakout and it is coming pretty quickly, in my view.
Market Outlook
An enormous a part of what occurs over the following 6-12 months can be extremely depending on the 2 trade teams above. There are over 100 trade teams and this can be oversimplifying shares a bit, however make no mistake about it. Increased progress prospects and decrease rates of interest may end up in flying PE ratios and these two teams are house to firms that may develop 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 have been simply uncovered to a different huge dose of it within the first half of 2025. At EarningsBeats.com, nevertheless, we have grow to be specialists 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 huge Wall Road 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. It’s essential 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 will we?
What do I imply by that? Effectively, we’ll have a lot extra possibilities to identify tops and bottoms sooner or later, however that you must study from this 12 months’s errors RIGHT NOW. Do not let these big-money, Wall Road crooks do it to you once more. Now we have one MASSIVE benefit on our facet vs. these massive Wall Road companies. We will 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 might recommend that you simply be part of me on Saturday, June twenty eighth at 10:00am ET for a 100% free occasion, “Buying and selling The Reality: How Market Manipulation Creates Alternative”. CLICK HERE to register and study extra in regards to the occasion! It is a MUST-ATTEND occasion and seating is restricted. You should definitely save your seat and learn to shield your hard-earned cash for the remainder of your monetary future!
Comfortable 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 Every day Market Report (DMR), offering steerage to EB.com members every single day that the inventory market is open. Tom has contributed technical experience right here at StockCharts.com since 2006 and has a basic background in public accounting as properly, mixing a novel talent set to strategy the U.S. inventory market.
