They Don't Ring Bells

"No one rings a bell to announce the top or the bottom of a market." -Old Wall Street Axiom

Despite large cap chip maker Texas Instruments down after earnings, perhaps no better sign of the continued euphoria in the winning tech plays is seeing the SMH sector ETF up another 2.6% as I write this, completely blowing off the TXN disappointment. One could certiainly understand a rally in the overall Nasdaq, given the surge in Netflix after earnings, even if ignoring TXN and the potential for chip gluts. 

But to ramp the SMH to this degree most likely speaks to the euphoria of the moment and the danger lurking below the surface when the trade inevitably unwinds--The further out the rubber band gets stretched, the more violently and abruptly it can snap. Also note tech is spiking higher again despite rates reversing higher off the opening lows. 

Tesla reports tonight, followed by some important macro data the next two mornings, sure to be market moving. 

Finally, to follow-up on our post from yesterday, note ISRG going green-to-red after earnings for a sign of actual logic. This is a wildly expensive and extended name, ripe for a key reversal day.