Wednesday, August 20, 2014

Daily Market Commentary: Semiconductor Gains Accelerate

It was more of the same from the Semiconductor index: a solid gain which took the index ever closer to 652 resistance. All of which is helping the Nasdaq and Nasdaq 100 maintain their push to all-time highs. Technicals for the Semiconductor Index are net bullish.  Weakness will offer itself as a buying opportunity, particularly at the breakout line and/or 50-day MA. Risk can be measured from the 38.2% fib retracement at $616.25.


The Nasdaq took a small loss, but 4,485 should be strong support. Losses back to this level will also offer a buying opportunity. A decisive undercut of 4,485 would switch to a 'bull trap', but that is not today's problem.


It's the same story for the Nasdaq 100: buy back to 3,997, but watch for a 'bull trap' on losses below 3,997.


The Russell 2000 lost a little bit of ground, but remained close to the 50-day MA. Technicals are not net bullish.


The S&P is the index to watch tomorrow. It has reached an inflection point: either it breaks 1,990 or it bounces off it. A bounce off may be nothing more than a delay, particularly if the Nasdaq continues to push higher. Note, technicals for this index are net bullish.


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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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