Good Monday morning. Heads up: while we’re still likely to add an options position in the semis (we do this approx once each year when the conditions are perfect on the VRA Investing System), we will not be doing it at the open as futures are higher this AM. Following a weak Friday (like this past Friday), the ideal set-up is to buy into a “lower” Monday morning open. Higher Monday opens are often faded by traders, meaning that I’ll be surprised if this higher open holds.

However, we do believe we’ll get the opportunity this week….just not at todays open.

Here’s the chart of SMH (Semi ETF), which shows SMH hitting its 200 dma while hitting heavily oversold levels on each of our momentum oscillators (but not extreme oversold). As with the 8/5 lows, we put a high probability of this 200 dma support level holding. There is no more important group than the semis. They lead in both directions…the problem is they have been leading lower. We look for this to soon reverse, with the semis...