Semis pull back: normal or the start of something?
The semiconductor group fell about three percent, its worst day in a month, after leading the market for two weeks. The pullback looked orderly, but I'm keeping an eye on it.
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After two weeks of leading, the semiconductor group finally took a breather. The question is always the same: healthy pullback or the first crack?
What an orderly pullback looks like
- Volume lighter than the up days that preceded it. Today’s was.
- The leaders hold above their 20-day averages. NVDA and AVGO did; AMD closed slightly below.
- No news. There wasn’t any, which makes this look like profit-taking rather than a change in the story.
What would worry me
A second down day on heavier volume, especially if it takes NVDA below the early-September gap. That would turn the group’s rally into a failed move and I would step back from every semiconductor idea on the list.
Plan
Nothing to do today. The setups I like in the group need a two- or three-day rest anyway, and this could be it. I’ll check the same three boxes tomorrow.