SMH Topping Tail Negated! Tech Rips On Massive Partnership

Hello everybody. Welcome to Trading the
Close. My name is Drew Dosic and guys,
what a weird and awkward conclusion to
the week this week with options
expiration. This was a quarterly options
expiration today. So, triple witching
option options expiration. And guys, we
did have some turbulence this week. We
had topping tails. We had topping tails
getting negated with the SMH weekly
topping tail getting negated today. We
had a big fall in the markets after the
FOMC, but everything just was in the
rearview mirror this morning when Trump
announced that, you know, Apple and
Intel are going to partner up and the
next thing you know, the Apple also
announced that their memory costs are
going to increase their charges for
their iPhones and other devices moving
forward. So, the attention quickly went
from the bad news in the FOMC back to
the memory stocks and then just
investing in those stocks, particularly
SNDK, Intel, all had great days today.
We're going to jump into those charts
and really break down what this means
later into next week. All right, guys.
First off, let's look at the S&P 500.
Nice day today, up 0.78%.
And you see yesterday we were very close
to tagging this inclining trendline
holding price elevated and separating it
from the bearish price action that we
had just the other day. And then notice
though, we're up here trading amongst
the middle to top portion of yesterday's
candle, recapturing a lot of yesterday's
losses. Big push today on the spiders.
Incredible correction, to be quite
honest. a very, very nice push up. Let
me flip over to the regular trading
hours. There we go. You see yesterday we
concluded here, gapped up and then
initially sold off, created a bear flag,
but then ultimately chopped around in
this range. The range of the first
10-minute candle for literally the
duration of the day. Now, this wasn't
the same story on other indices,
particularly the SMH, uh but for the S&P
500, we're not at all-time highs. An
all-time high would be our resistance
level if we start marching up that way
next week. Um that area would be for
resistance on this inclining trend line
right around $760.86.
To the downside, got to be monitoring
this break level right here for further
downside pressure. That level to be
watching come Monday is at $739.39.
Next up, the IXIC, the Nasdaq Composite.
Great push up here today, completely
reversing the losses that occurred
yesterday. So, we were talking about
bearish signals on the chart, how we had
engulfing reversal candles, and now we
have a complete reversal candle here on
the Nasdaq Composite. So, it's a lot of
whipsaw action should be anticipated for
options expiration week. However, these
certainly are throwing patterns uh one
way and then another way and then
keeping us on our toes. Uh needless to
say, but guys, that can happen on
options expiration week. We can have
false breakouts. We can have false
breakdowns, too. So, really it
especially after a quarterly options
expiration, you got to pay attention to
the following week. We've negated the
SMH weekly topping tail, which we're
about to check in on. But, how long does
that proceed? Usually a weekly topping
tail, a larger time frame topping tail
takes several weeks to negate. It only
took 2 weeks on the SMH. Really
remarkable stuff. And so, I caution
everybody. I know we've been just
bullish beyond bullish on the SMH, which
very well could remain because we've we
were attempting to break down. However,
when we're starting to show cracks in
the ice, it is emerging before options
expiration, and then all of a sudden
options expiration gives us two
completely different views that makes us
have to look forward into next week, get
some more answers, see these patterns
develop and play themselves out a little
bit better. So, back into the NASDAQ
composite, upside resistance won't be at
all-time highs on Monday. It's actually
going to be at 26,873
points. And then if we start
consolidating up here in this range, we
then could potentially break through and
push to all-time highs. Downside support
will be on this top end of the parallel
channel, 25,313
points.
Into the SMH, which I have already been
touching on and I highlighted that fact
this week of how we've been really
tempting breaking down on this SMH. Look
at all of these days on this inclining
trend line when which price was either
closing below, then above, then below,
then back above, then below the last two
days. We actually closed beneath the
last two trading days, but then today
separated ourselves from that trend
line, much like what occurred on Monday
of this week. So, will we have a repeat
next week on Monday with price coming
right back down and testing this trend
line. That level is going to be at
$631.83,
but I want to remind you, this is a very
big close today, guys. Here's our weekly
topping tail that was highlighting the
fact SMH was on basically had its back
against the wall about to start breaking
through that wall and going down on the
charts, but we clearly are putting in
very nice wicks last week. Look at the
wick on the bottom of this weekly candle
this week, too, illustrating buyers are
buying the dip in the SMH, now pushing
us up 290%
since our April liberation day lows. You
can see that right here on the chart.
Massive push up and each time we've
gotten over 230% gains on the SMH ever
since back here in the 2021, we've
declined 30 to 40%. Now we're pushing up
290%
with this key trend line still holding
price intact. It's truly remarkable,
guys. Um it's something for the record
books, and this is really an amazing
March continuing on the charts. All
while, you could see we actually evened
out our RSI. We've been overbought for
so long, and the declines that occurred
on this trend line started evening out
the RSI, making this divergence on this
chart. So, it's telling us we're trying
to make a top. However, it's just not
coming, guys. And so, next week we'll
have to monitor, see if we get price
close to this trend line. Otherwise,
it's blue skies up ahead and overhead,
as well. Into the 10-year. Now, the
10-year can present problems. We've seen
that when the 10-year has risen higher,
it's created selling pressure in the
markets. Today, we did not finish near
the lows. And we we are not up here
testing the top range of this key
resistance level of 4.484. So, in
essence, we're just consolidating. And
we're doing so in a bearish manner. But
whenever we're doing bearish
consolidation, right under a resistance
trend line, it's kind of a 50/50 split,
because we're bubbling up against this
resistance level. And so, we could very
well start breaking up above it, but
larger pattern still shows a bear flag.
So, larger pattern is what I angle and
lean towards. So, that tells me the
10-year could be dropping next week. But
we're going to be paying close attention
to this, cuz the 10-year rising likely
will put pressure on equities. And it
also will put pressure on the
commodities, like gold. And you see here
with gold having another down day today,
getting down here underneath this green
candle. Now, yesterday I was saying it
was positive, we were staying up within
this green candle on Monday the 15th.
But now today, we're trading underneath.
It looks like we're about to close
underneath that candle. That could
actually increase probabilities of
coming of us coming down and retesting
this level of $4,030.
Next up into silver. Similar situation
here, except for silver's extended
itself a little bit further from this
consolidation that occurred. So, that
tells me we're likely coming back down
here to 6102 in the near future. Small
minor support right here on this pivot,
but this is just one candle, guys. We
had a collection of say 10 to 14 trading
days of consolidation. I'd say, "Well,
you know what? We probably could
bounce." But, this is just one candle,
one intraday bounce, and I'm seeing this
potentially coming down a little lower
on the charts to 6102, then 5509
on the charts.
Uh next up, into US oil. US oil had a
slightly positive day. It did breach
lower, though. It did go as low as
$72.83.
Um but, I've highlighted this. We're
actually oversold near term on the daily
time frame, due for some sort of small
technical bounce. Now, we did have uh
news come out today that the president
announced that they did sign the Iran
agreement with the Strait of Hormuz
opening. I imagine if there's any sort
of disruption there with that story,
with that plan, we will be marching
right back up on US oil. First
resistance, $86.26.
If that agreement goes uh smoothly, we
likely could be seeing some more selling
pressure on US oil. Next level of
support down here on this declining
trend line at $69.56.
Next up, into nat gas. Nat gas today
really chopping sideways. We've shown a
uh breakdown potential, no confirmation,
then we saved ourselves. Yesterday, we
had another close underneath this
inclining trend line. This is reminding
me a lot of what's going on over on the
SMH. So, no confirmed breakdown yet,
still like a spider web catching support
right here in this price range. Upwards
resistance right here on the bottom of
this parallel channel, $3.34.
And uh you want to see nat gas, if
you're a bull, get above this inclining
trend line. That's not much for it to
do. On Monday, that's going to be at
$3.26.4.
Uh next up, and uh we got Bitcoin. Look
at Bitcoin today, guys. Doing its best
to try to hold the bottom range of this
parallel channel. The last 3 days really
gave up all the gains extending itself
away from that parallel channel. So,
we'll watch over the weekend. Now, the
weekend sometimes has bullish activity.
There's lighter volume in involved on
the weekends, more retail traders
involved, likelihood of them buying is
higher than them selling. But, I got to
point this back to the weekly time
frame, guys. We're starting to develop
wicks here showing that we could be due
for a bounce, but it didn't happen on
this week's candle. Instead, we're
closing this week down here near the
lows. We'll see what happens over the
weekend. As I said, we could eventually
start poking up just a little bit more,
but this head and shoulders pattern
still intact. Next level of support,
should we break this consolidation at
$57,856
followed by the head and shoulders
target at $37,508.
All right, into Intel where I mentioned
that Intel did announce, or actually the
president announced that Intel and Apple
have a partnership and Intel
is going to be building the Apple chips.
That implies that they're going to be
building the M1 chips. And so, you see
here today, Intel had a nice push up up
10.64%.
Look where it put on the brakes though,
guys. Right at the top of this parallel
channel. Now, let me zoom back out on
the weekly time frame and you can see
this parallel channel began back here in
November of 2022 when price entered
nearly on the 50% area, chopped right
there, and then plunged down to create
the low pivot. And since then, we have
rocketed up here to the top and made the
high end of this parallel channel which
price now is budding up against. Next
week, this is a key level. You can look
at this on the weekly chart and see how
this is much tighter price action. Yeah,
we did have some big variations here.
However, it was several candles move up,
and then the following weeks were all
contained within this green candle. So,
this is sideways bullish consolidation.
Today, we put a close above the range of
all of that consolidation. So, Intel is
on breakout watch. Even though it's not
over this parallel channel, we did put
in a weekly close above this
consolidation. So again, for that
confirmation to kick off next week, we
want to see a weekly close above this
week's candle. It's not that much higher
from current price, so it's something
that certainly can be done. If we could
do that, then let's confirm above the
parallel, then we're talking about Intel
potentially making brand new all-time
highs and marching up on this chart for
the year of 2026.
All right, next up into IBM, guys. Look
at this collapse on IBM. Now, part of
the reason of their collapse was because
of ACN. I know this isn't a direct uh
identical company to IBM, but they have
very similar strategies. And you see ACN
here drop 17.97%
today off of weaker earnings and weaker
guidance than analysts anticipated. So
back to IBM, IBM had a rip-roaring rally
back into this parallel channel. But if
you see here, if I scroll back out on
the weekly time frame, we still had a
really fast rally and then a really
equally as fast rejection from here back
down into this bearish consolidation. In
your term, that's not very good for IBM.
So IBM needs to do its best to hold this
near-term inclining trend line with
support right here at $238.05.
Holding that will give it the
opportunity to get a bounce and retest
the bottom of this parallel channel at
$291.25.
Otherwise, if we get back in this
consolidation and don't receive a bounce
off this inclining trend line, we could
be putting in more consolidation, much
like what already occurred, and then
start breaking these levels of support
to come lower down here to 19806.
And you see here, 19806 aligns very
nicely with this previous pivot top back
here in March of 2024. This would be a
very nasty decline here on IBM, but you
could see some of its other competitors
in the marketplace are
getting beat up there, too. Um so we see
what also is going to be back up of
support on this level of $198. We've got
the 200 weekly moving average in this
red line trailing up here crossing over
that level of support. So, we've got a
couple of good levels of support for
IBM, but we'll see if that's just too
much damage by the time price gets down
here. So, there's your road map for the
chart of IBM.
Next up, we've got Microsoft. Equally as
beaten up, I would say as IBM. When
we're talking about over 30% off of the
highs uh from from Microsoft, that's a
nasty decline here on this chart. But, I
do find something pretty interesting on
the daily time frame. Notice this
breakout that has occurred most
recently. We had nice breakout,
consolidation on that trend line. Then
we did get a bounce when price finally
pierced the bottom of this parallel
channel. Now, we're plunging underneath,
but where did price price tag today and
put in a very nice close? Notice how it
closed off of its lows pushing up
towards the highs. Well, it tagged this
declining trend line. This was just
simply a retrace and another bounce off
of this support level. So, if this does
carry any sort of momentum into next
week, I can see Microsoft attempting to
attack the bottom of this parallel
channel. But, I've got to warn you guys.
You see, I've got lines down here and
further support levels. Let's scroll the
chart back out a little bit so you can
see what is a potential for happening.
I'm not saying Microsoft's going to do
this, but at least this is what I see on
the chart. We see a collective left
shoulder, a head, and then an awkwardly
shaped right shoulder. If we do get
price underneath this inclining trend
line connecting these two low pivots,
guys, that carries a measured move
target all the way down here to $157.
Now, that you may sound that that
doesn't even sound right, Drew. Well, if
I go back here on the chart, yeah, we've
got some really interesting price action
particularly right around COVID lows in
which price rallied up, sold off, and
then rocketed up. So, this very well
could happen, guys. So, we're talking
about a huge move on Microsoft. Now, one
thing for me, I don't mind picking up
Microsoft and hanging on to it. This is
one of those mega caps that it will
catch a bid again in the future. Or at
least, that's what it's done for us in
the past. So, that's what I expect to
happen in the future. So, I don't have a
problem buying this on the way down. But
guys, if that does break that neckline,
um it's not going to go straight there,
but it will have some bounces along the
way. Likely will even retest this
neckline. But jeez, you just got to keep
that on the radar. If that is a
possibility, understand what you're
going to be investing in and how to
maneuver about in a situation like this
on the chart of Microsoft. Uh next up,
guys, into WDC. We highlighted this the
other day. Daily topping tail. We traded
within it yesterday. But then, guys, we
negated that daily topping tail. But
what did we do? We went ahead and put in
another daily topping tail. So, this is
really awkward. And you can almost see
that on the several of these charts. AMD
is another one. Topping tail, topping
tail, topping tail.
Back-to-back-to-back. Like, when you see
these charts, it just kind of really
scratches my head. Like, the selling
pressure is there. The investors are
wanting to get out. But then all of a
sudden, some news headline drops and
everybody wants to rush back in. But
midway through the day, they all sell
again and and they create these topping
tails. So, along with the SMH, I know
WDC and all of these aren't all included
in the SMH. But you just got to follow
the semis, guys. When the semis start
breaking, the rest of these charts will
start breaking as well. Until that
happens, these charts have a chance to
recover, much like what we see on this
chart. Daily topping tail here on
Tuesday, uh negated by Thursday. But
we're throwing in another daily topping
tail. So, something for us to monitor
next week as we could be trading amongst
this candle, potentially even coming
back, doing one of our um uh standard
breakout retrace bounce plays into next
week. We'll see if we get that. It'll be
very interesting to see.
Coming off the week of the FOMC, guys.
So many headlines left and right pulling
me. Literally, I'm getting whiplash,
guys, this year following the news and
following these charts because, man, it
is it's been some truly remarkable stuff
and patterns to follow when they get
negated, what we can expect. I'm so
happy to be here with you guys, and
thank you so much for joining me. Don't
forget to like and subscribe to the
video. Send it out to your friends and
family so they too can learn technical
analysis in the charts. Been one heck of
a shortened week. Enjoy the longer
weekend, everybody. Have a three-day
weekend. Happy Father's Day to all the
fathers out there. Can't wait to be back
with you all on Monday. Until then, be
safe, and I'll see you guys on the
charts. Take care, folks.
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