Wednesday, September 08, 2010

Daily Market Commentary: Markets Hold Up Well

It was a good stint for the market with volume rising to register a modest accumulation day - undoing the selling volume of yesterday. The S&P is well positioned to make another run on its 200-day MA; look for higher prices on Thursday.

($SPX)

via StockCharts.com

Better still - there was a relative strength shift from the 'safety' of Large Caps to more speculative Tech stocks as illustrated by the Nasdaq. Here too should a challenge of a 200-day MA be mounted.

($COMPQ)

via StockCharts.com

The biggest gainer was the Nasdaq 100 as it cracked through its 200-day MA - August's reaction high at 1,918 is next resistance.

($NDX)

via StockCharts.com

But the fly in the ointment remains the semiconductor index. The loss of the trading range hurts this a little more each day a rally fails to materialise. This - to me - looks very bearish with declining 20-day and 50-day MAs to add selling pressure. It's hard not to see how any further selling here could take out the nascent rally for the Nasdaq and Nasdaq 100. Keep those stops tight and nimble.

($SOX)

via StockCharts.com

Thursday is nicely set up for some upside follow through and potential challenges of indices 200-day MAs. If Wednesday's lows get taken out, or worse still, start the day by gapping below - then it could turn into a solid day of selling. Keep an eye on the semiconductor index for leads.

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