Thursday, November 11, 2010

Daily Market Commentary: Support Holds For A Second Day

Bears took another crack at beating the markets and while the Nasdaq and Nasdaq 100 fell out of their channels yesterday, the S&P and Dow held on to theirs.

Tight intraday action for the S&P left the index right on channel support; tomorrow will either see a decisive break or a respectable bounce. Room to play on the swing off Thursday's high/low.

($SPX)

via StockCharts.com

The Nasdaq gave up channel support but was able to defend the gap and the 20-day MA. There was a MACD trigger 'sell', albeit from a flat-lined position. A break of the 20-day MA would set up for a move to the 50-day MA.

($COMPQ)

via StockCharts.com

The Russell 2000 has no such considerations, trading in the middle of its rising channel with technicals holding the bull side.

($RUT)

via StockCharts.com

The semiconductor index opened at support and broke through - getting close to its 20-day MA - before rallying to close higher. Pending 'Golden Cross' between 50-day and 200-day MAs. Bulls may only be getting warmed up here.

($SOX)

via StockCharts.com

Tomorrow offers a good trading opportunity for channel support buys in Large Cap indices. Can the defense of support for the semiconductor index help the break of channels for the Nasdaq and Nasdaq 100? Are the latter indices moving to a slower advance? Will buyers prevail?

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