Tuesday, August 31, 2010

Daily Market Commentary: Semiconductors Crack as Markets Pause

In the end it was a clean break; semiconductors gave up nearly 2% and the last hope for a bull trap went away. The nascent CCI 'buy' signal disappeared with the losses - it's looking ugly for the semiconductor index

($SOX)

via StockCharts.com

While trading volume rose there was little change in the end-of-day price for the rest of lead markets. The S&P finished with a small (indecisive) spinning top and remains on course to test channel support.

($SPX)

via StockCharts.com

The Dow touched its rising channel support

($INDU)

via StockCharts.com

The Nasdaq continued to toy with July support as it closed with a spinning top. But today's action in the semiconductor index suggest the breakdown is going to happen soon.

($SPX)

via StockCharts.com

Even if markets were to rally it's unlikely going to be enough to reverse the break in the semiconductors - and this is the worry for the markets.

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