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Chips slip. Dip or blip?

The so-called correlation between the SOX and S&P 500 since 2005 has been 84%, according to data from Asbury Research, an independent research firm in Chicago. Basically, that means that 84% of the time, the SOX and S&P 500 have moved in the same direction.  Asbury’s John Kosar said the correlation between the S&P 500 and SOX so far in 2012 is above 90%.

So chip stocks may be that proverbial canary in the coal mine. If they start to lose momentum, all of tech and even the entire market may do so as well.

“Nothing goes up forever. We had been expecting this for a couple of weeks,” Kosar said. “It’s just statistics. As fearless as investors have been lately, the fastest horses should crack first.”

Asbury Research subscribers can view our Friday May 2nd report entitled Weakening SOX Index Could Lead A US Broad Market Correction by logging into our Research Center via the gold button at the upper right corner of this screen