Seeking Alpha

Kevin Tuttle's  Instablog

Kevin Tuttle
Send Message
Kevin A. Tuttle is the CEO and Chief Strategist of the Money Management & Capital Services firm Tesseract Asset Management, LLC (TAM). TAM serves as the General Partner of Long/Short Equity & Alternative Investment Hedge Funds and operates a Capital Services division oriented toward... More
My company:
Tesseract Asset Management LLC
My book:
Master Traders
  • TAM's Pedagogics: April 4th, 2011 0 comments
    Apr 4, 2011 8:23 AM | about stocks: SMH, SOX, AMAT, TXN, INTC, BRCM, NVDA, MRVL, MU, KLAC, AVGO, XLNX
    In the March 10th Pedagogics we wrote about the PHLX Semiconductor Index (SOX) being a leading secondary index to the NDX. The post discussed the decade-long downtrend resistance and it’s convergence with a similar length Floors & Ceilings; creating a massive wedge formation. 
     
    SOX Weekly

     
    On a shorter-term basis (using the SMH for volume analysis purposes) – throughout March – the index created an intermediate-term Double-Top (DT) formation with a Stochastic & Volume Divergence and its neckline converged with its 50-DMA. This bearish pattern occurred at the ‘Decade Wedge’ inflection point; to a tee. Since the break the index has successfully retested its 50-DMA neckline with less volume. On Friday, the trend change was confirmed with a decent distribution volume day as the majority of the top ten stock weighted stocks* in the index turned tail at their respective retest resistance levels.
     
    *(AMAT, TXN, INTC, BRCM, NVDA, MRVL, MU, KLAC, AVGO, XLNX)
     
    SMH Daily

     
    Why is this important? When a secondary index (such as the SOX) leads the way when a potential trend change is looming, it adds to the probability factors when determining the potential weakness within the broader index. Otherwise stated, when having a technical question about where technically the NDX lays (uncertainty), this helps us reassess the probabilities of its next direction. Technicians should always evaluate secondary indices to not only help ascertain broader direction, but used as confirmation ‘of’ direction.
     
    I hope this helps.
     
    KAT
     
    *Disclosure (TAM is short SMH, QQQ)

    Themes: NDX Stocks: SMH, SOX, AMAT, TXN, INTC, BRCM, NVDA, MRVL, MU, KLAC, AVGO, XLNX
Back To Kevin Tuttle's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.