📈 What Happened to Semiconductors?

This is why we sold off.

Semiconductors Sell Off

Yesterday we saw a significant sell-off across the board in semiconductors. The SOXX made emphatically rejected a higher high and we saw leading names drop, specifically the semiconductor capital equipment manufacturers.

Notice how this bar on the SOXX encompasses over a week of trading range. This is now a control bar that needs to be cleared before the index can move anywhere.

What Caused It?

The sell-off was a result of ASML inadvertently leaking their earnings early on their website during trading hours.

Therefore investors got an early look at earnings, and while revenues were in line, bookings were 50% below expectations.

Bookings being down for ASML has a ripple effect on the entire semiconductor industry, as it could be a sign of slowing demand across the board. That’s why we saw a broad-based sell off.

The worst part is that the conference call is not until 9:00 AM ET this morning, so investors saw the light bookings, but there was no explanation as for why it is occurring.

This is going to be crucial today and will dictate how semiconductors act.

I walk through this in further detail and share my trading strategy here: