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.


via StockCharts.com

The S&P looks set to test modest bullish channel support.


via StockCharts.com

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.


via StockCharts.com

Same for the Nasdaq and 2,098.


via StockCharts.com

Tomorrow may see some early morning downside before channel support kicks in. However, this support may be short-lived. The subsequent rally may only last a couple of days before a more protracted decline kicks in.

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