Wednesday, November 10, 2010

Daily Market Commentary: Channel Support Defended

Yesterday's weakness followed through in the morning to tests of channel support for Large Cap indices. The Nasdaq closed its recent gap before finishing higher.

The S&P made a picture perfect test of channel support and the close inside yesterday's real body sets up a possible move to channel resistance.



The Nasdaq came back to close the gap. With the gap closed the Nasdaq needs to push on, otherwise seller confidence will grow the longer 2,590 plays as resistance.



The Nasdaq 100 offered another possibility (the same is true for the Nasdaq) - a channel breakdown.



Meanwhile, the semiconductor index is back testing trading range support.



Bulls will want to press the advantage of the morning recovery. Look for intraday supply around 1,220 with a 1,226 break required to negate the intraday bull trap from yesterday. Let's see how bulls play the channels.

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