BUZZ-Flip chips back to large cap tech

** Chip stocks have stumbled vs both large cap tech and thebroader Nasdaq Composite ; VanEck Vectors SemiconductorETF spread vs Technology Select Sector SPDR Fund now looks to see further contraction

** SMH still outperforming YTD with 4.4 pct rise vs 0.8 pctXLK gain and IXIC 3.9 pct loss

** However, over past week, post-Brexit panic and recovery,SMH lagging both XLK and IXIC advances by 80 bps and 140 bps

** And so far today, SMH down 1.6 pct as Citi Researchanalysts make negative comments on the group; Q3 results to beimpacted by Brexit fallout ; follows similar BofA-MLcommentary last week

** Charts bearing out sour turn as SOX/Nasdaq Comp ratio nowfalling to 1+ month low, despite index bouncing off itspost-vote low

** SMH-XLK spread had surged to daily closing high of $14.58just prior to British vote; now $12.53. Chart: http://tmsnrt.rs/29l96Vn

** And despite bounce off $12.00 post-vote low, spreadappears to be rolling over again; can decline to test supportline from Feb low, now $10.00 area, at a minimum

** Need close back over $13.64 to suggest spread resumingadvance