Tech Trades Squeeze Stops; Russell 2000 Approaches Resistance

There is a bit of an overreach on today's action as the level of loss was light. However, the much-anticipated breakouts in the Nasdaq and Nasdaq 100 look like they will have to wait a little longer. Both Tech indices saw the squeeze put on tight long stops, but not enough to suggest a panic sell-off is imminent. However, any sell-off has to be watched; losses below the 50-day MA would be concerning.

The Nasdaq 100 is looking a little more vulnerable with the MACD trigger 'sell' and +DI/-DI sell' trigger. Look to this index for leads.

The index which has been offering the low-key opportunity for bulls is the Russell 2000. It fell just 2 points shy of the 1,450 target I'm looking for, but no reason to suggest it can't make this tomorrow.  Technicals remain healthy.

As a footnote, the S&P and Dow did little worthy of attention. Breakouts remain intact and Technicals are sound.

For tomorrow, it's a watch-and-wait scenario for Tech indices. The Russell 2000 remains a hold with perhaps partial profits for longs - the potential for a break of 1,450 is good.

You've now read my opinion, next read Douglas' blog.

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Dr. Declan Fallon is a blogger who trades for fun on eToro and can be copied for free.
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Minor Changes: Yesterday's and Weekend Comments Remain Valid

I don't want to overplay today's action as little changed in the broader scheme of things. Days like today are welcomed and help shape up swing trades for those trading in near term timeframes.

The tight doji in the S&P could be used for a swing trade; buy a break of the high/short loss of low - stop on flip side. High whipsaw risk but look for 3:1 risk:reward and maybe trail stops if deciding to go with partial profits.

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Semiconductors Breakout

It was somewhat disappointing not to see the Nasdaq and Nasdaq 100 make the break from resistance. However, the Semiconductor index did manage a breakout of 1,150. There was some weakness into the close but the fact the bearish engulfing pattern has been negated means the bearish overhang created by this pattern has been consumed.

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Still Waiting For Tech Breakout But Omens Good

Expiration Friday pushed some heavy volume through the markets but the buying wasn't enough to bring about much-anticipated breakouts for the Nasdaq and Nasdaq 100. However, Friday's action suggests all remains good for this to happen early next week. But any drop below 5,900 in the Nasdaq 100, and 6,350 in the Nasdaq has the potential to set up a cascade of (long) stop hits.

For the Nasdaq, anyone who took advantage of the channel support hit mid-August (green arrow) will be sitting pretty. I would be looking for a move back to channel resistance.

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