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Semiconductors Breakout

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It was somewhat disappointing not to see the Nasdaq and Nasdaq 100 make the break from resistance. However, the Semiconductor index did manage a breakout of 1,150. There was some weakness into the close but the fact the bearish engulfing pattern has been negated means the bearish overhang created by this pattern has been consumed.

Still Waiting For Tech Breakout But Omens Good

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Expiration Friday pushed some heavy volume through the markets but the buying wasn't enough to bring about much-anticipated breakouts for the Nasdaq and Nasdaq 100. However, Friday's action suggests all remains good for this to happen early next week. But any drop below 5,900 in the Nasdaq 100, and 6,350 in the Nasdaq has the potential to set up a cascade of (long) stop hits. For the Nasdaq, anyone who took advantage of the channel support hit mid-August (green arrow) will be sitting pretty. I would be looking for a move back to channel resistance.

Dow Follows S&P Breakout

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It was a bit of a slow burn day. The S&P held its ground and its breakout without generating significant weakness. However, the Dow managed to post a new closing high although the percentage gain is low and volume was below average.

S&P Breakout Holds

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Large Caps and the S&P, in particular, has been leading the broader market with this week's breakout. Technicals are all net bullish as the index looks to mount a challenge of rising channel resistance, which is still some distance away. Current momentum suggests higher prices are favoured and it will take a loss of the channel and a failed retest of the prior high to suggest bears have regained control - so shorts will have to wait longer before they can act.

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