The Semiconductor Sector Is Due for a Pause
by Jeff Clark
SMH – the VanEck Semiconductor ETF – is up 80% so far this year, versus a 10% gain in the S&P 500.
Now though, the chip stocks are overbought and overextended to the upside. They’re likely to decline or consolidate for the next few weeks while the lagging sectors of the market play a game of catch-up.
The last time we had this sort of setup in the chip sector was back in October 2025 – just before earnings season.
Regular readers will recall we turned cautious on the sector, citing similar reasons as we’re citing today.
SMH fell 13% over the next three weeks.
A similar decline this time around would take SMH from its current level near 595 to 518 – effectively wiping out all of the gains of the past month.
Source: Jeff Clark Trader
https://jeffclarktrader.com/market-minu ... ning-sign/
