Tuesday, February 28, 2012

Daily Market Commentary: Semiconductors Drive Tech Gains

Indices continued their march higher. The semiconductor index was the day's chief winner with a gain of 1.5% The advance in the Semiconductor index passed through to the Nasdaq and Nasdaq 100, with a lesser gain for the S&P and Dow, but a small loss for the Russell 2000.

The semiconductor index had lost support from its 'Santa Rally', but was able to defend its 20-day MA. Today's rally was part of the 20-day MA defense. Whether the February swing low becomes part of a new rising channel won't be confirmed until 438 is breached.


The Nasdaq and Nasdaq 100 were chief beneficiaries of the gain in the semiconductor index. The Nasdaq 100 is riding along channel support helped by higher volume accumulation.


Along with the Nasdaq


The S&P posted a smaller gain than was seen in the Nasdaq without the higher volume accumulation. Relative strength continued to swing from Small Caps to Large Caps.


Helped by today's loss in the Russell 2000.  Note the selling pressure on the 20-day MA; a break of this support level leaves a sizable gap to the 50-day MA.


For Wednesday, keep an eye on the Russell 2000. If bears take control of the market their presence will be felt first in the Russell 2000. A break from the horizontal trading range may be enough to take profits in Tech and Large Cap stocks. The difficult aspect to this is its neither a good time to buy or short into a new position, so this rally may keep ticking higher until someone blinks.

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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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