02Jun10:12 amEST

Tough to Step in Front of This One

Semiconductors have been symbolic of this bull run on many fronts, not only refusing to permit a garden variety correction but consequently surging higher just when it appears the eventually breakdown is nigh. 

Recently, the spurt of big-time M&A activity added fuel the fire for some of the comically steep long-term trends, such as that of SWKS. 

AMBA has been another explosive semi, though that one is coming in with its peers this morning. Shorting individual semis at this point is quite risky due to the heightened M&A risk. And shorting the sector, perhaps via the SOXS bearish ETF, may be the toughest trade to make but perhaps the correct one, in light of the historical warning sign we saw from the gargantuan BRCM deal. 

At any rate, also note AAPL is down this morning, as related semis are taking the brunt of the beta.

On the SMH, sector ETF, daily chart, below, a simple check-back to $57 would not be out the question. At that point, we would see if this is just another shallow dip or instead something more meaningful for the semis. 

 

Stock Market Recap 06/01/15 ... Mind the Correlated Paths

 
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