NEW YORK ( TheStreet) -- In my opinion the semiconductor industry is an important economic indicator. If the economy is strong the demand for devices containing semiconductors should be robust. Strong demand for durable goods is also a sign of demand for semiconductors as just about every appliance used around the globe has semiconductor components. The benchmark I use for the semiconductor industry is the PHLX Semiconductor Sector Index ( SOX). If the SOX ends the month below its five-month modified moving average at 398.27 the monthly chart profile will begin the second half of 2012 with a negative monthly chart profile. This would be a warning of a slowing global economy. During the strong market performance since the March 9, 2009 lows, the SOX peaked well before the Nasdaq. The SOX tested its high for the move at 474.33 on Feb. 18, 2011. Compare this to the Nasdaq, which peaked at 3134.17 this year on March 27. This divergence should be considered the first warning that global economic growth is not as robust as analysts thought. The SOX is only up 3.9% year to date with the Nasdaq up 11.0%. A lagging SOX is another economic warning. Here are two more statistics showing the drag of the SOX. The SOX is only 17.5% above its Oct. 4 low compared to 25.6% for the Nasdaq. The Nasdaq is 7.7% below its March 27 high while the SOX is 20.2% below its February 2011 high. Let's look at the daily chart for the SOX. The SOX reached a year-to-date low at 348.94 on June 4 and rebounded to a test of its 50-day and 200-day simple moving averages, which are in a "death cross" formation at 387.16 and 390.30. Note also that the daily momentum (12x3x3 daily slow stochastic) reading is declining. I am projecting risk back to the Oct. 4, 2011 low at 322.24 in the second half of the year. Chart Courtesy of Thomson/Reuters Here are profiles for five semiconductor stocks that are Buy rated according to ValuEngine.