Easter Pullback Recipe Calls for Bittersweet Chips

Recent blog posts have centered around the significance of the semiconductors, clear leaders of this market's resilience on the way higher for months, quarters, even years of end. True, Qualcomm has been glaringly weak for a while now, a recurring short idea and trade for us inside Market Chess Subscription Services. 

But we did not want to allow the QCOM weakness and action on the short side to blur our version in terms of extrapolating the QCOM issues out to the entire sector. 

Instead, we wanted to wait for the SMH (sector ETF) to show actual cracks in the foundation, which we are finally seeing this week. 

Combined with the small caps in the Russell 2000 giving back all of yesterday's gains at one point today, the semis are adding to the cautionary feel of the market as they operate below the SMH's 50-day moving average for the first time in 2017.

To be sure, the steep prior uptrend in the SMH is far from broken. However, this type of action in a holiday week with major earnings approaching has us leaning cautious in terms of not being too aggressive on the long side.

And on the short side, a name like Intel, below on the daily chart, may be ripe for a quick move down before earnings at the end of the month. 

I will highlight a few other ideas to keep tabs on in my usual Midday Video for Members.