The Sucker Rally is OVER!

The market finally took the cue from semiconductor and financial sectors and went down convincingly.  Small cap stocks lead the way down (long TZA).  SMH, INTC, AMD and NVDA charts are very bearish and red candles are everywhere. However SMH, INTC and AMD are not far from support levels and may bounce off supports in the next few sessions.  If you still long them you need to take this window of opportunity to exit the market.  NVDA's chart is the worst looking chart among them.  I plan to hold my NVDA shorts for a while.  My SSG position provided me with some nice profit and I am looking to repurchase them if we get a reaction rally.  In addition to the NVDA short currently I am still holding TZA and SRS (long) and C(short).  Looking to establish more shorts in financials (long FAZ or short AIG, HIG or BAC) if a reaction rally occurs among these names.  The followings are a few unannotated charts.  Good Luck!

AMD update

Although the HS pattern did not materialize and AMD rallied with the INTC's number, the week ended up with  a red candle with "window" (gap).  The two gaps actually formed an island reversal pattern. This is not good technically. Both INTC and SMH looked week again after INTC Q3 results.  INDU was making new highs without semi and tech which is very troublesome.  The following SMH chart illustrates the weakness of semi with several red candles showed up at the upper trading band where normally green candles reside.  It rises a red flag for the bull and it is time to play defense.  If the 3rd indicator turns red in the next few trading sessions, it is very likely that this bull rally for semi (potentially for the market) is over.  Stay tuned!  Good luck!

AMD/SPY ratio chart (PnF) is breaking down!

The relative strength of AMD vs SP500 is weakening since Oct 1st.  The ratio PnF chart is flashing a sell signal at this moment.  This ratio chart was able to signal the pullback from the June 4.9 high correctly. It is a  reliable chart to follow.  AMD is about to announce Q3 results in a few days.  However, the trading action of the stock in the last few sessions is lackluster.  It is unable to close above 5.7 and the head-and-shoulder really concerns me.  It is time to play defense and stay on the sideline.  I actually bought some SSG today.  Generally Semi  leads the market and it looks like it is leading this market down.  Good Luck!