Semis have knocked traders' $SOX off, but will head & shoulders roll?

The semiconductors have been as important a sector as any in the equity markets' march upward. The daily chart of the semiconductor index ($SOX) suggests an uptrending channel within which this index has been zigzagging. The recent drop including with the StochRSI dropping down from overbought. Some may see this as a potential bearish head and shoulders pattern, although bulls may see it as a potential "W" or reverse (bullish) head and shoulders. The $SOX could fall all the way to its 200-day moving average, and get support for another bounce up. My monthly chart suggests an interesting larger context.

My trendline markings on the monthly chart show that there remains a little "air" above in case the $SOX is able to make another new rally high. And yet, it also looks like the semis' rally has been a backtest of broken support. By this time it seems the semis may well make it to the upper line on the monthly chart downtrending "fork", whether or not the current pullback goes very deep (it may not be very deep considering we can't expect much pullback in the broad indices now). Assuming it tests that line, we'll get to see "the big test": will the semis be able to get above that? Or be pushed back into another down wave with the bearish fork?

My bias is that it will get pushed back, if the test occurs in May or at least by August. That kind of timing would work with the idea that the broad market crests in that time frame. I know Andre Gratian projects the market won't crest until later, maybe next year. But I'm going to remain wary, based in part on Terry Laundry's current T Theory projections and partly on the Benner-Fibonacci cycle pointing to a significant high during 2010.