Stock Market Commentary: Shooting Stars + No New Highs (sort of)

The first post-Labor day ended up as it started with a gap-and-stall. August highs weren't challenged and while volume was higher (to register an accumulation day) it was still well below what has traded over the summer.

The Nasdaq remains nestled in the middle of its rising channel and has room to resistance over and above a break of August highs. Relative strength has swung back in favour of tech stocks over large caps.

With small caps leading tech - the most bullish environment for stocks. Better still for small caps was the break of the 20-day MA; something which other indices had managed to do on Friday.

The Semiconductors did break with the day's convention and posted a new closing high. An earlier MACD trigger 'sell' was broken to the upside too but wedge resistance remains in play.

However, with rising channels dominating indices remain in rally mode. The question is how long ever weakening sentiment can hold indices at current levels without a significant downleg developing (or at least one long enough to take sentiment to oversold levels)?

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

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