Daily Market Commentary: 'Bull Trap' Confirmed in Semiconductor Index
The failed breakout in the Semiconductor Index expanded with another loss above 1%. Monday's loss took it below the 20-day MA, kept the MACD 'sell' trigger in play and generated a CCI 'sell' trigger.
Other indices similarly pulled away from Friday's sell off, but not enough to break support. The S&P remained above 1,987 and will see a test tomorrow. Technicals are mixed: the Directional Movement System is bullish, but the MACD has been bearish for most of September.
The Nasdaq didn't 'bull trap', but it's heading to a combined test of 4,485 trading range and the 20-day MA.
Meanwhile, the Russell 2000 broke below channel support in an acceleration of the losses from August's highs. A move to the May 1,090 swing low is the next key target. The July swing low may/may not play a role in the move down.
Tomorrow may see support tests and offer rebound opportunities. Best of these plays could be the Nasdaq given the convergence of the 50-day MA and 4,485 key support. If bears take control of morning action, then a Semiconductor push to its 50-day MA is a better option as a short/long switch.
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Other indices similarly pulled away from Friday's sell off, but not enough to break support. The S&P remained above 1,987 and will see a test tomorrow. Technicals are mixed: the Directional Movement System is bullish, but the MACD has been bearish for most of September.
The Nasdaq didn't 'bull trap', but it's heading to a combined test of 4,485 trading range and the 20-day MA.
Meanwhile, the Russell 2000 broke below channel support in an acceleration of the losses from August's highs. A move to the May 1,090 swing low is the next key target. The July swing low may/may not play a role in the move down.
Tomorrow may see support tests and offer rebound opportunities. Best of these plays could be the Nasdaq given the convergence of the 50-day MA and 4,485 key support. If bears take control of morning action, then a Semiconductor push to its 50-day MA is a better option as a short/long switch.
---
Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.
All Contributions Welcome - Thank You!
Follow Me on Twitter
Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
You can read what others are saying about Zignals on Investimonials.com.
JOIN ZIGNALS TODAY - IT'S FREE!
