#Semiconductors — When S&P Semiconductor Index is up between 25% and 50% through mid-October, typically the strong momentum continues [[6-months forward avg. 35.47% 6 up / 0 down]]…… pic.twitter.com/AbARSmMmKh
— Nautilus Research (@NautilusCap) October 14, 2020
Today’s Chart of the Day was shared on Twitter by Nautilus Research (@NautilusCap). It’s a chart of the Semiconductor index over the past 30-years. This index is currently up more than 30% year-to-date. Nautilus points out that when this index has been up 25-50% through mid-October, the strong momentum has typically pushed the index even higher in the following months. Looking at the forward returns following the past six occurrences, the index was higher 1-month, 3-months, and 6-months later almost every single time. The only exception was in 2009 when the index fell 2.59% one month after the signal. As you might know, Semiconductors are found in almost every electronic device. Due to their widespread use, this industry group is a leading indicator for both the stock market and the economy. Continued strength from the Semiconductor index in the coming months would support the bull case for stocks.