Daily Market Commentary: Semiconductors Struggling
It was a bit of blitz on technology indices and semiconductors as sellers swept the day. Large Caps escaped largely unscathed, although there was still enough damage to see a breakdown in the bear flag.
The semiconductors are in the most trouble. Today's losses undercut the prior swing low. With the index trading below all key moving averages (20-day, 50-day, and 200-day MA), it looks like things are going to get worse before they get better.
The Nasdaq 100 sliced clean through its 50-day MA, and is looking at trendline support. If this fails to hold it's the 200-day MA next. Given action in the semiconductor index, it's looking more likely the index will drop to its 200-day MA. The Nasdaq 100 was the first of the key indices to turn net bearish technically.
There was also a break in the Nasdaq. The loss undercut the channel support line too, with next support its 200-day MA. Unlike the Nasdaq 100, there was no net bearish turn in technicals - although it's getting close.
The S&P likewise experienced a breakdown, but is above its 50-day MA and channel support, and has the strongest technicals of all the indices. Note how relative strength is improving relative to Small Caps indices.
Small Caps also experienced a big drop, but finished just shy of its 50-day MA. Technicals are not as weak as for Tech indices, and there is a possibility the 50-day MA will play as support tomorrow. Best chance for a short term long trade.
A bounce tomorrow?
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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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The semiconductors are in the most trouble. Today's losses undercut the prior swing low. With the index trading below all key moving averages (20-day, 50-day, and 200-day MA), it looks like things are going to get worse before they get better.
The Nasdaq 100 sliced clean through its 50-day MA, and is looking at trendline support. If this fails to hold it's the 200-day MA next. Given action in the semiconductor index, it's looking more likely the index will drop to its 200-day MA. The Nasdaq 100 was the first of the key indices to turn net bearish technically.
There was also a break in the Nasdaq. The loss undercut the channel support line too, with next support its 200-day MA. Unlike the Nasdaq 100, there was no net bearish turn in technicals - although it's getting close.
The S&P likewise experienced a breakdown, but is above its 50-day MA and channel support, and has the strongest technicals of all the indices. Note how relative strength is improving relative to Small Caps indices.
Small Caps also experienced a big drop, but finished just shy of its 50-day MA. Technicals are not as weak as for Tech indices, and there is a possibility the 50-day MA will play as support tomorrow. Best chance for a short term long trade.
A bounce tomorrow?
---
Follow Me on Twitter
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.
Zignals offers a full suite of FREE financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own strategy and sell it in the MarketPlace to earn real cash.
You can read what others are saying about Zignals on Investimonials.com.
JOIN ZIGNALS TODAY - IT'S FREE!
