SOXX stock scares me right now folks. Yes it had a big up day but one day does not a market make. I put the prediction odds at about 50% if SOXX goes higher or lower from here. I’m not convinced SOXX has bottomed for the weakest 6 months of the year and I’ll explain why.

SOXX Stock Chart

SOXX stock chart

The biggest warning flag about this chart is the falling CMF. The money flow should be rising on a candle over candle turn like we had today. A falling money flow questions the longevity of the upward move.

Notice that the candlestick today has a longer upper-shadow than lower-shadow.

The Parabolic SAR is still giving a sell signal which is another bearish indicator.

The PPO histogram bars are still negative. Notice that the green PPO line has not crossed above the red yet and even if it did, the level of the PPO lines are bad. The best PPO buy signals are when the green line crosses above the red line at a good low negative level like -0.50 or -0.75. The current level of +1.25 makes for a bad buy signal even if the green line does cross above the red line tomorrow.

Finally, the large players volume is falling in SOXX stock:

Large players volume on SOXX stock is falling.

Usually when you get a candle over candle reversal that has momentum behind it, you get a spike up in the large players volume. Large players volume could reverse tomorrow. The point is that it hasn’t reversed yet and so that calls into question how long this upward move will last.

Keep in mind that some traders will be shorting SOXX because of the negative divergence between share price and the large players volume. I did a swing trading lesson on divergences with large players volume here.

I think with the data that we have today, SOXX is going lower IMO but that’s only a short-term move. I would like to look at taking a long entry in SOXX in the last half of October because SOXX Rocks long-term as seen here.