Daily Market Commentary: Day of Rest

Large and Small Caps had a very quiet day, trading in a very narrow range. Tech had more of a struggle, giving up close to 1% on light volume.

The semiconductor index is showing trouble at its 200-day MA which is undermining the Nasdaq and Nasdaq 100 advance. With the 20-day MA converging on the 200-day MA bulls will have to act soon if they want to break the trading range (which is still a long way off).


via StockCharts.com

The Dow was able to close a little higher, but it's doing its best not to break out of its channel.


via StockCharts.com

The index to watch is the Russell 2000. It's well positioned to reach its target of 715-720. It has natural support of the former trading range and the 20-day MA to help.


via StockCharts.com

The semiconductor index will likely play a significant role in the future direction of this rally. If it pulls further away from its 200-day MA and below its 20-day MA it will weaken the foundation for further gains in the Nasdaq/Nasdaq 100. If the rallies in the Nasdaq/Nasdaq 100 weaken it won't be long before Small and Large Caps follow suit. There is a hint of this happening but for now bulls still have control.

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