Daily Market Commentary: Semiconductors Remain Under Pressure

It was a mixed day for the indices.  Large and Small Caps staged a modest recovery on low volume which at least held back a selling follow through.  However, it wasn't such a good day for the semiconductor index, it closed lower on the day but it didn't break yesterday's low. It also held key support of 395 which is a strong vantage point to mount a challenge tomorrow.

Weakness in the semiconductor index spilled over into the Nasdaq, although losses were minor and the March swing low wasn't violated.

On more positive news, weakness in Tech has resulted in money rotating into speculative Small Caps (in addition to defensive Large Caps).  A break above 814 would be a very positive development - new longs could use yesterday's low as a stop placement, working on an assumption 814 will be breached.

Tomorrow looks better suited for longs to work some magic.  The proximity of support - or at least a low risk stop - offers something for buyers.  Shorts will likely not get aggressive until overhead 20-day MAs are tested.


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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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