Weekly Update (AMD)

1.  AMD started the week with a health 3-day retracement and touched the low of 4.13. The gap between 4.2-4,3 has been filled.  The stock gaped up again on Thursday and finished the week near the high of week.  The minor gap created on Thursday between 4.33-4.35 is not as significant as the gap between 3.71-3.88 which I considered as a breakaway gap and could be left unfilled for years.  If the broad market tumbles hard in the next week or so this gap could be filled and it should be a place to add.  Otherwise AMD is ready to challenge the June high soon.  However we need to keep a close eye on the broad market since it has shown signs of weakness and appears to be ready for a correction.  A major market correct could delay the movement to 7.5 or even revert AMD's strong technicals.

2.  The semiconductor cycle (~6 year) appears to have returned and semiconductor stocks are currently outperforming the SP500 index.  Perhaps a long SMH and short SPY trade could be a good hedge in the current economic environment no matter which directions the market is heading in the next few years.  Anyway keep eyes on the semi stocks.