Tuesday, September 25, 2012

Daily Market Commentary: Semiconductors Break

Yesterday, semiconductors were knocking around 50-day MA and 390 support. Today, these gave way with relative ease - this is bad news for the Nasdaq and Nasdaq 100.

The semiconductor index was already net bearish on the technical front, but there was no doubt who had control of the index today. The next support level is 374, then 350.  A relief rally will likely encounter supply at the 50-day MA.


The Nasdaq retreated back to its 20-day MA, but given the damage in the semiconductor index it may struggle to hold this. The MACD trigger switched to a 'sell' to add to the selling pressure.


The S&P also experienced losses, but continued to post a relative gain against Small Caps (Russell 2000).


The Russell 2000 finished the weaker, ending at its 20-day MA. Technicals had already broken, but bulls have a chance of working a bounce off this moving average as they did in August.


Wednesday may see a modest recovery as indices attempt to dig in at their 20-day MAs. But after days of quiet action today's losses was a show of hands by bears.  Trickier times ahead for bulls, but a day (long) trade may offer itself tomorrow.

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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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