SOX-SPX is still down below the channel. While the book-to-bill data have been firm (through June), the Semi index is starting to act like it would like to be in line with 2013 bullish running mate PALL-Gold, which is now bearish.
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As for former leader RUT, it is just too erratic now (vs. SPX) to do much good as a short-term indicator.
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With reference to the first chart above, here's it's pal PALL-Gold on its ‘economic down'signal. Again, we recall that it was quite some time before PALL-Gold seemed to mean anything to the majority of participants when it triggered up early in 2013. So what about the recent signal? Should we not have the same kind of patience, in reverse, as back then?
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After all, mainstream financial professionals were cashed up and braced against the ‘Fiscal Cliff' disaster in Q4 2012 and did not begin to recognize a new market phase until well into 2013. I know this for a fact, since I interacted with one who spoke for the ‘best and brightest' fund managers back then. We also know our friends at the MSM were in full bear mode back then.
Maybe PALL-Gold means nothing this time and maybe the Semi divergence is going to repair itself. Then again, maybe not, which is why I think patience is kind of a big thing now.
