Chips Continue to Experience Weakness

The semiconductor stocks, which had been showing nice support off their long term trend as late as last week, showed more weakness yesterday. The SMH reversed and rolled over after attempting to regain its 200-day average. If a rotation into tech is going to have any chance of working out, chips are going to have to start behaving a lot better here. At this time the market just feels very weak and breadth figures are very poor on market rallies and good on market sell offs. This indicates continued distribution and there is a good chance that support levels established by the multi month uptrends started last October are in jeopardy of failure. Don't expect the Fed to provide much help this week. They are very unlikely to provide the market relief by projecting when rate hikes will finally end. In fact, they are likely going to do what they always do; overshoot thier target. We are once again seeing metals and oil showing strength while not much is working in the broader market.