After Friday's sell-and-recovery it had looked like there was an opportunity to play a bounce, particularly for the Semiconductor Index. However, the reality proved to be different. Instead, sellers maintained the run of form from Friday and pushed the Semiconductor Index right down to Friday's low - undercutting the 50-day MA in the process.  Monday's close delivered a net bearish turn in technicals. The slower trendline connecting the July-August swing lows is the next target down.

Volatility took a tick higher with profit taking sweeping across the broad before buyers zipped it all back up. Trump's Russian investigation will add a level of uncertainty to the Tax Cut rally and markets may take another trip into Friday's intraday low; should markets deliver a lower close Monday then it could turn into an ugly week as traders will need to defend Friday's lows  The Semiconductor Index was hardest hit last week but it was able to dig in at its 50-day MA and finish the week above this key moving average. If there is going to be a rally I would look to this index to deliver simply because it suffered the hardest level of selling and should be the most amenable to a recovery rally.

There was a clear shift in market behaviour as Large Caps enjoyed the fruit of renewed buying as Tech indices (Semiconductors mostly) felt the heat of profit taking. After weeks of tight gains in the Semiconductor Index it was an easy turn for profit takers to come in and push the market down; in the absence of logical support it was going to be a hard task to pinpoint where potential depend may lurk outside of 1,150.  The 50-day MA may provide one such escape but there isn't a whole lot to suggest it may play as support.

In the end, it wasn't Tech to surprise with an acceleration past its bullish rising channel but the S&P and Dow with fresh breakouts. A confluence of positive data  fueled the advance in Large Caps along with a dollop of short covering.  Tuesday's action ranks as a breakout in this indices and brings into play new support levels should profit-takers come in to take advantage of the gains.  The only downside for the S&P was the continued downtrend in relative performance against Small Caps - suggesting the real money is flowing into more speculative issues.