Tuesday, July 17, 2018

S&P Firms Breakout As Tech Keep The Pressure On

Given overnight news and Netflix disappointment I was surprised to see markets finish as strong as they did given comments on the economy by the Fed Chairman.

The S&P opened at support and 'engulfed' the prior day's trading; it's not a true bullish engulfing pattern as this is a reversal pattern and what we have is a breakout but it does contribute to a confirmation of the breakout.


The Dow Jones is inching towards channel resistance. In the context of other indices, it was a low key day.


The Nasdaq threatened a nasty double top after the market gapped down but a strong push into the close retained the breakout.


Opportunists could have taken advantage of the gap down in the Nasdaq 100 as it started picture-perfectly at breakout support. Some traders did get lucky as volume climbed to register as accumulation.


The biggest gain was in the Semiconductor Index but it didn't quite negate the breakdown. I would be looking for shorts to attack this tomorrow with the 20-day and 50-day MA overhead.


The Russell 2000 is firming support at the 20-day MA and the risk:reward is looking better here for longs wanting to prebuy a challenge on resistance. Technicals are still mixed and relative performance remains weak but it looks good.


For tomorrow, aggressive shorts can look to the Semiconductor Index but if Tech indices hold their breakouts it could drag the Semiconductor Index higher. Indeed, the Nasdaq 100 had offered the clearest buying opportunity today which finished in the green.  The Russell 2000 is struggling a little below resistance but the lack of attention could be beneficial for those looking for a low-risk buying opportunity.  There are chances here but markets are at a bit of a crossroads.

You've now read my opinion, next read Douglas' blog.

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Dr. Declan Fallon is a blogger who trades for fun on eToro and can be copied for free.I invest in my pension fund as a buy-and-hold.
 
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