Markets continued with their sideways pattern in a refusal to succumb to easy profit taking.  The exception looks to be the Semiconductor Index which continued to advance. The only disappointing aspect to the Semiconductor Index is the failure in the MACD to kick higher. It's not a deal breaker as price action and other technicals are very healthy.

The weak start didn't deliver a rout in markets. Instead, after the obligatory first half-hour of trading came the (bullish) reversal which lasted the rest of the day.  The overall picture hasn't changed, with the S&P stuck inside a narrow range, but a panic sell-off looks less likely now. Buyers look keen to defend drops below 2,170 in the S&P.  Volume climbed to register accumulation, despite general holiday volumes. Bulls will want to see a fresh MACD 'buy' to confirm an end to an effective 7-week consolidation.  Aggressive traders can look to the 20-day MA for buying opportunities and/or trailing stops.

While volume climbed to rank as distribution there wasn't a significant relative loss for markets.  However, the selling perhaps marks an indication that the summer lull is a maximum for the Brexit recovery. Today's selling started yesterday and continued through the day. The S&P shows this with the Inverse Hammer followed by today's red candlestick combo. The support line from the Jobs Data breakout hasn't been breached and this may be enough to keep longs in their positions. However, a weak open tomorrow could open the flood gates, and a loss of 2,160 may see others pile in.

GBP/USD A better day for sterling versus the dollar, as cable inched up to the $1.30 handle after the UK’s official statistics office said inflation crept up to 0.6% in July from 0.5% in June. This stemmed losses that had seen cable drop below $1.29 on Monday. Sterling was flat versus the euro as the pound was slightly higher against its major peers, recording its first session gain in two weeks. But sentiment is still pretty bearish. Net shorts at the CFTC are at the highest in years and JPMorgan says cable should slip to $1.25. More data out this week will offer fresh impetus – retail sales, average earnings and employment figures on the way. USD/JPY Sentiment towards the greenback is also looking decidedly bearish. USD/JPY plunged below the 100 mark but quickly recovered after William Dudley, the New York Fed president, said the FOMC could still vote to hike interest rates in September. The dollar was still down almost 1% against the yen as economic reports disappointed