I've reduced my NQ1!30408.25 long exposure as SPX7703.819824 approaches the upper channel boundary, taking profits of over 1,000 handles. I still expect NDX30113.464844 and SPX to print new ATHs in the coming weeks, contingent on the conditions I outlined over the weekend, with the positive headlines I anticipated already starting to arrive, including another reported TACO on strikes against the Houthis and today's formal confirmation of Xi's September 23–25 visit to the US. But the rebound has been too sharp, too fast. That is why I'm taking some off.
If SOXX548.09 holds this morning's gains into the close, KOSPI will likely open above 7.1K resistance tomorrow. If NDX and SPX go on to print new ATHs, where will that leave SOXX?
My view remains that AI and semis are a bubble waiting to burst. New ATHs in both SOXX and KOSPI would invalidate that view.
560 and 580 are the key resistance levels to watch on SOXX. Around 580 sits the generational trendline that capped SOXX in 2021 and again in May, July and August this year. A sustained break above that trendline would invalidate my thesis of an eventual collapse in semis.