One would have to be nuts to take a new position, long or short, in front the employment number due to be released tomorrow morning, as it is likely to push the Fed one way or the other vis a vis interest rates. Still, on a purely pattern recognition analysis, three stocks are setting up for a fall. They also happen to be the three top holdings of SMH, the Vaneck Semiconductor ETF: NVDA, TSM and AVGO, making SMH a prime candidate for Oct puts. When looking at these four charts, one image comes to mid: Wile E Coyote speeding off of a cliff. They are all just one bad day away from signalling a 10%+ decline in the weeks ahead. Consider waiting for that next bad day, or alternatively, buying an initial position now, adding more as the decline is confirmed. Aggressive traders can go ahead and buy puts now, using a tight stop if SMH rallies after entry. SMH Stop on a close back inside the big up channel, above $295 Top 3 Component Stocks NVDA A Short in and of itself if NVDA declines below the horizontal parallel trend channel, below $167.\ TSM AVGO Oct SMH Puts
