The $SMH(VanEck Vectors Semiconductor Index ETF)is on fire this morning.  The index is up just shy 4% on heavy trade.  If it can finish the day with at least a 4% gain it would mark the 2nd best day of the year for the $SMH.(Tuesday the index gained 4.25%).  This is quite a reversal from the action earlier this week.  On Monday the index continued its steep slide that began on Oct. 4th following another clear break of 200 day moving average support.  At Monday’s close the $SMH had stretched its Oct. 4th breakdown to a 15% loss while entering deeply oversold territory.  With today’s ramp the index is up 11% from this week’s low.  This powerful move has left layers of support in place.  In the very near term this move is a bit overdone.  Best to wait out a pullback.

At time of publication we are long SMH in some managed accounts.