XLK is in a perfect Sornette bubble melt-up going vertical now. It’s also in a megaphone 5th wave melt-up. These are the kinds of melt-ups where right at the top everyone feels like it’s going to last forever.
XLK is just reaching the top of the red megaphone. This move is not going to turn with an exact touch on the top. It will break through that top and put in a topping pattern before a reversal to at least the red megaphone VWAP and almost certainly at least a retest of the August 2015 low.
I already know about earnings. Nobody needs to explain to me why XLK can’t possibly crash. I’m just showing you the chart. XLK could easily get going on another bigger, faster, better melt-up after the pullback.
And again, don’t try to short at the megaphone top. XLK could climb that top for months or put a big topping pattern up there that could murder your bankroll. Often we’d see a tall, thin rising wedge once the price is moving straight up, and a break-out from that would tend to be a great short.