SOX - Philadelphia Semiconductor Index (ETF reference)

SOX has a weekly topping tail bearish reversal signal after making a new all-time high. The signal remains intact. If SOX fails to close the week above 620, the bearish signal holds and further downside is expected. Soloway states semiconductors are the driving force behind the entire market.

The SOX index is trading 62% above its 200-day moving average — the widest gap in the history of the index. Michael Burry has loaded up on put options betting against semiconductors. The AI infrastructure buildout may not generate revenue fast enough to avoid bankruptcies.

The SOX has hit a 7-candle exhaustion count at a major trend line extending from the COVID low. Soloway notes this pattern has been a reliable exhaustion signal over the past decade and a half, and the last comparable move was during the dot-com bubble.

Soloway is actively short semiconductors, citing parabolic blow-off top, $15 trillion market cap (half of US GDP), 73% gain in 5 weeks, logarithmic trendline resistance, and RSI negative divergence. He compares it directly to the dot-com bubble.

Referenced as the most famous semiconductor ETF but noted as expensive. Felix demonstrates using the Winston App to find cheaper alternatives.