Daily Market Commentary: Semiconductors Shine, S&P Primed

How much further can the S&P pressure resistance without actually breaking resistance? The tight action over the past couple of days will unwind with a decent one-day move; to catch it, trade break of Monday's high/low with a stop on the flip side. The S&P (Large Caps) is clinging on to its out performance of the Russell 2000 (Small Caps).

The semiconductor index enjoyed a strong day, starting with an opening gap and never looking back. It's caught in the no-mans land between its 50-day and 200-day MAs which makes it difficult to define the trend, although bulls are making a decent fist of it. Technicals bullish and improving - this suggests room for further upside.

Unfortunately, strength in the semiconductor index didn't translate directly to the Nasdaq.  However, should semiconductors drive above its 200-day MA there will be additional support for continuation of a tech (Nasdaq and Nasdaq 100) rally.  The Nasdaq has the additional benefit of trading above its 200-day MA.

For tomorrow, the S&P should (finally) clear 1,280 resistance. Watch the semiconductor index for potential leads in feeding a rally in the Nasdaq or Nasdaq 100.


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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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