Thursday, September 29, 2011

Daily Market Commentary: Techs Hit Hardest

It was a relatively mute day for Large and Small Cap indices, but Technology wasn't able to escape the glare of traders. China troubles brought the focus firmly on the Nasdaq and Nasdaq 100.

The heavier volume selling ranked as distribution for the Nasdaq, but buyers were able to do enough by the close to preserve channel support.

($COMPQ)
via StockCharts.com

The selling in the Nasdaq 100 resulted in a widening of support. The selling dropped it below the 50-day MA but not enough to take it outside of the consolidation. However, there is a MACD trigger 'sell' with on-balance-volume close to a 'sell' trigger too.

($NDX)
via StockCharts.com

On the plus side, the semiconductor index took a hit, but it has managed to keep itself above former consolidation resistance-turned-support.

($SOX)
via StockCharts.com

The S&P is wavering around consolidation support. Today's upper intraday range spike reflects the overhead supply.  In all likelihood the S&P will take a swing lower when interest in the Nasdaq abates.

($SPX)
via StockCharts.com

Finally, the Russell 2000 finished the day just above 650. The potential of a 'bear trap' remains for this index but there can be no losses tomorrow.

($RUT)
via StockCharts.com

As for tomorrow? There is reason for optimism with the last hour of buying pushing indices above intraday resistance. But there is significant overhead supply to consume, particularly for the S&P. Buyer beware.

As for sectors, Energy and Semiconductors are favored for bulls.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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