Showing posts from August, 2010

Daily Market Commentary: Semiconductors Crack as Markets Pause

In the end it was a clean break; semiconductors gave up nearly 2% and the last hope for a bull trap went away. The nascent CCI 'buy' signal disappeared with the losses - it's looking ugly for the semiconductor index ($SOX) via While trading volume rose there was little change in the end-of-day price for the rest of lead markets. The S&P finished with a small (indecisive) spinning top and remains on course to test channel support. ($SPX) via The Dow touched its rising channel support ($INDU) via The Nasdaq continued to toy with July support as it closed with a spinning top. But today's action in the semiconductor index suggest the breakdown is going to happen soon. ($SPX) via Even if markets were to rally it's unlikely going to be enough to reverse the break in the semiconductors - and this is the worry for the markets. Follow Me on Twitter Build a Trading Strategy Business in Zig

Daily Market Commentary: Semiconductors Pile On The Pressure

Selling in the semiconductor index dominated the day as any hope for a bull trap (and therefore an opportunity to prevent similar breakdowns in the Nasdaq and Nasdaq 100) rapidly turned to smoke. The semiconductor index is going to need at least a 14 point gain (4%+) to give bulls any chance of making a stand. Even then, the 20-day and 50-day MA are available to add supply to the market. Note the sharp drop in relative strength to Nasdaq 100 once the 200-day MA broke. The tentative bullish technical development in the CCI is likely to disappear on another day of selling. ($SOX) via The S&P looks set to test modest bullish channel support. ($SPX) via The Russell 2000 is likely to see a test of key support around 590.5 tomorrow. The outlook for this test is negative given the action in the semiconductors. ($RUT) via Same for the Nasdaq and 2,098. ($COMPQ) via Tomorrow may see some early morning downside b

Weekly Market Commentary: Market Not Oversold

No surprise to see markets ease lower but there has yet to be a clear drop into oversold conditions. The S&P does have the early makings of a bullish divergence in the MACD histogram although I'm not convinced the 61.8% Fib retracement will act as support for a second time; look to the 50% mark at 951.70 for buyers. ($SPX) via The Nasdaq is toying with the head-and-shoulder neckline and is closer to oversold than the S&P. It has yet see a test of its 61.8% Fib retracement at 2,050. Nasdaq via Small Caps too also have to contend with head-and-shoulder support ($RUT) via Breadth indicators look down towards the abyss. The Nasdaq Bullish Percent hasn't reached the 40% level typical of reaction lows; or tested whether it will make a dive into the teens or sub-10% of the past couple of years. ($BPCOMPQ) via The Percentage of Nasdaq stocks above the 50-day MA attempted to dig in the 25-30% '

Daily Market Commentary: Pressures on Semiconductors

Thanks to Newark Air Traffic Control it has taken 3 days to return from the US, so here is a belated market review for Thursday. While overall market action has kept with range-bound trading, semiconductors have succumbed to selling pressure, breaking the July anchor support (which is support for the Nasdaq and Nasdaq 100) as the Russell 2000 (Small Caps) also feels the heat. ($SOX) via The Russell 2000 is tentatively hanging on to July low support. Note the 'Death Cross' between 20-d x 50-d MAs; look for the 20-day MA to act as resistance on the next rally. ($RUT) via Large Caps have a tentative upward channel which may be defended; first up is the Dow. Although technicals are net negative prior to the rising channel support test. ($INDU) via The S&P is looking a little more buoyant ($SPX) via Bulls will need the semiconductors to muster some form of bear trap over the coming days if the sellin

Weekly Market Commentary: Finishes The Week Near Lows

Last week's bearish press continued with a late week flurry of selling which kept indices on the weak side. Technicals similarly weakened but none are at levels to suggest markets are oversold. The S&P is a prime example of this with stochastics [39,1] just below the 50 neutral line: ($SPX) via For the Nasdaq the head-and-shoulder neckline remains in play with lower highs and lower lows the order of the day (week!) Nasdaq via Nasdaq Bullish Percents fake a Stochastic 'buy' - big void down to lows... ($BPCOMPQ) via The Percentage of Nasdaq stocks above the 50-day MA hasn't reached oversold conditions either (technicals and indicator) ($NAA50R) via Finally, Small Caps show a bearish head-and-shoulder reversal pattern with Friday's finish close to neckline support. ($RUT) via Look for more weakness next week. I am back on Tuesday with normal service (Twitter too) on

Weekly Market Commentary: Bulls Blink?

With another week of my vacation left it was all go for the markets. The semiconductor index was first to blink as the 200-day MA broke on the daily before the lead indices tanked the next day. The semiconductor index went one step further and crashed through trading range support; lead indices remain range bound but I suspect they will follow suit next week unless bulls can create a bear trap in the semiconductor index. ($SOX) via Weekly charts are looking more ominous for bulls. In the S&P note how stochastics are some way from turning oversold. Don't expect 61.8% Fib retracement to hold as support as it did earlier this year. ($SPX) via Same story for the Nasdaq. Only consolation is the low volume. Nasdaq via Nasdaq Bullish Percents showing lots of room to the downside if last year's lows are to be tested (although a brief drop sub-40 may be enough). ($BPCOMPQ) via The confirmed buy in the Na

Vacation Time

Expect light posting for the next couple of weeks. Thankfully, today was quiet on the market front.

Daily Market Commentary: Large Cap Breakouts Hold For a Second Day

It started out like it was going to be a taxing day for the markets, but in the end markets finished modestly higher on light volume, doing enough to keep the rally ticking along. The S&P held 1,118 support and is nicely positioned to push higher. ($SPX) via The Nasdaq still has to test June reaction high resistance, but like the S&P there is much to stop a 36 point gain to reach this point. ($COMPQ) via The Russell 2000 was able to nip a declining resistance breakout on the back of a bull cross between 20-d x 50-d MAs, but it still has June-July reaction highs to test. ($RUT) via The semiconductor index held on to its 200-day MA for yet another day but is struggling to break free of its 20-day, 50-day and 200-day MAs convergence. ($SOX) via With another few weeks to go before vacation season ends there could be some further gains to bank before the real action (up or down) kicks in. Follow Me

Daily Market Commentary: Large Cap Breakouts Hold

Key to today's action was for large cap's to hold yesterday's range breakouts and this they did. Bulls can be satisfied with the days work; it will be important there is no significant deterioration from here and key moving averages can hold in support. For the S&P this is the 200-day MA, but even an intraday reversal will look to the 20-day MA for support. ($SPX) via The Nasdaq registered slightly higher selling volume (distribution) but the 200-day MA was not violated as support - a typical consolidation day. ($COMPQ) via But the Russell 2000, with a similar tight range day, kept below resistance. ($RUT) via And the semicondutors are struggling to hold their 200-day MA. ($SOX) via So while today sprung no real surprises there are still concerns amongst semiconductors and small caps which could drag the large cap breakouts down. Follow Me on Twitter Build a Trading Strategy Business

Daily Market Commentary: Large Caps Lead

While relative strength holds in favour of small caps it was all large caps today. There were also 'Golden Crosses' between 20-d x 50-d MAs for nearly all key indices, reflecting the growing bullish momentum in the markets. The S&P cracked through June high resistance - albeit on light volume - to set a new closing (but not absolute) high for the rally off July lows. ($SPX) via While the Dow didn't post as great a gain as the S&P it did manage to work itself perfectly off former channel resistance-turned-support; managing a new closing and absolute high for the July rally and killing the April-July decline. ($INDU) via The Nasdaq and Nasdaq 100 also impressed although each remain contained by June reaction highs. ($NDX) via ($COMPQ) via One index to disappoint was the Russell 2000; Monday's gain failed to crack resistance and unlike the other indices there was no 'Golden Cross'


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