SMH

Now, what could give the Q's in the S SNP 500 more room to run is what's occurring here on the SMH. Just like on the cues, guys, look at this gap up over resistance. Resistance that on Friday was in play.

The top of this old parallel channel and we just gapped up over it. Instead, we actually sold down and caught support on the top of it this morning and then rallied all the way up, pushing through this gap fill from August 17th.

Now, here's where everything gets a little bit more interesting. Actually, before I flip that on, let me highlight the fact of this declining trend line right here that you see from the all-time highs on the SMH back on June 22nd.

Notice how when I drew this, I drew it down to the next pivot. Notice how when price came up again, it attempted to go through, did not close above on the very next attempt, we actually got through.

And then the following day, we didn't succeed in pushing higher, getting extension and away from that declining trend line. So, in turn, price just found its way going right back down. another one day up and then we had three days down.

Now we have three days in consecutive pushing order upward on the chart. This is the first time this has happened since the all-time highs. So right here, this is a big change in character.

We're now starting to confirm a breakout from this declining trend line. Then when I flip over the simple moving averages, guys, the blue is the 50-day moving average. This is the first time as well that we've gotten now two daily candles pushing up consecutively and closing above that 50 simple moving average.

Now guys, what this does is it turns on the buy switch for a lot of other institutions, a lot of which refrain from buying any sort of stock or index until price action can get properly above the 50-day moving average.

Now, there's a couple more moves that are required for more institutions to hop on board, and that would be this yellow 20 moving average that's currently sitting at $55,960. If that were to get above the 50, and then that kickstarts even a bigger rally and push higher up on the SMH.

Now, the SMH is, as you may recall, I've said this is my leading indicator. So, right now, I've got a positive signal telling me that we have a breakout on our hands. Now we watching for tomorrow on the breakout from this inclining parallel channel.

Putting in a daily close higher than today would accomplish that next resistance 60758 from that point. Watch for any sort of uh retraces to the top of the parallel. That could be your buying opportunity to continue with this rally.

But be mindful of these moving averages and the details that I just went over for you on this chart to ensure we remain in bullish uh momentum when you're buying the SMH.

Into the SMH, guys, SMH, as we see, did pull back slightly yesterday. And if you recall from watching trading the close, I've been illustrating this daily, guys. really monitoring what's going on with the SMH because I see the SMH as being the leading indicator for risk on sentiment in the markets.

And what we've analyzed and discussed this declining trend line that you see on the chart is from the all-time highs. We most recently have broken out and extended away from that trend line.

A great breakout. In doing so, we broke out of this longerterm inclining parallel channel. This parallel channel contained price since the liberation day lows back in April of 2025.

So getting out and back above that again near-term bullish double breakout on our hands. Price just has simply gotten jammed up right here at the 618 fib retrace from this decline which is at 607 and 58.

Getting through that would be very bullish near term. So I see any close daily above 60758 that does increase probabilities for SMH to go up and attack the next key resistance level at 635 and84.

So be watching the daily close today. If we close above that key level of resistance 60758.

Now we move on to the SMH index . SMH's performance wasn't bad either . The situation did not look good at first , just as it did with the S&P 500 when we saw a downward gap, then entered a downward accumulation phase, and then came that news which completely turned the tables on the market's momentum and expectations for the whole day.

As you can see, we closed the trade close to closing the gap at the end point. We are seeing a slight decline after trading hours. Now, the resistance level, as you can see here, at the top, is the 618 Fibonacci retracement level from its all- time high to its most recent low .

This level, as I mentioned, is located at 607.58. This level is likely to remain a resistance level in the near term, even if we rise further tomorrow. It will likely take at least 4 to 7 days of accumulation before we start to rise.

However, the bottom line regarding the SMH index today is that it has declined, but not enough to reach the top of this parallel channel, as we saw here in the IXIC index breakout correction bounce.

The index has not yet fully declined, at least to the top of this parallel channel, in order for a rebound on the SMH index to follow.