“Despite the supposed end of the PC, I’ve been noticing some very interesting behavior in the semiconductor space, as its performance echoes the late-2010 period of strength in risk assets.
Semis are generally perceived to be an aggressive way to play equities because of their more cyclical nature within the technology space, and their outperformance provides some insight into the nature of risk-sentiment, as well as the potential duration of strength.
Markets love symmetry, and to that end, the relative behavior of the industry now is important to watch. Take a look below at the price ratio of the Market Vectors Semiconductor ETF SMH -0.12% relative to the S&P 500SPY -0.15% . As a reminder, a rising price ratio means the numerator/SMH is outperforming (up more/down less) the denominator/SPY. For a larger chart, visithttps://twitter.com/pensionpartners/status/289704766269956096/photo/1 .
Leadership off of the mid-October low has been fairly powerful as semis began leading, and the trend higher appears very much to be intact…”
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