Stock Market Commentary: We have life!

If you ignore the continued lackluster action in large caps there was a modicum of joy with a significant resistance line break in the semiconductor index. This help push the Nasdaq above its 50-day MA and kept the Nasdaq 100 above its 50-day MA.

The semiconductor index is not totally out of the woods with reaction highs at 224.59 and 236.12 to be breached; but if the latter is surpassed it would leave a clean run to the 200-day MA.

Don't underestimate the importance of the semiconductors as a leading index in the early recovery phase from a recession. While I am not suggesting the economy is going to turnaround tomorrow it is good to see some respectable demand from investors for this sector (look at on-balance-volume for the semiconductor HOLDRs (SMH)). Unfortunately, my personal semiconductor purchase in September jumped the gun leaving me sitting on a loss; but it is acting better now than it has in a long (long) time.

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, market alerts and stock charts website

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