Daily Market Commentary: The Back & Forth Continues

Yesterday's day of weakness was followed by a day of gain. However, there was one index which suffered a second day of losses in a row. The semiconductor index cut through its 50-day MA in a warning to Tech indices.  The semiconductor index is on the verge of becoming the first of my followed indices to turn net bearish technically.

The Nasdaq was quiet as a result. The gains Large Caps offset by the losses in the Semiconductors.

The S&P made a straight gain with higher volume accumulation. It will find it hard to sustain itself in the face of selling in Small Caps and Tech, but it will do its best to try!

But the Russell 2000 suffered.  The 20-day MA was undercut, with the 50-day MA next in line for a test.  There was also a sharp shift in relative strength away from Small Caps; a more worrying long term development.

Despite the gain in the S&P, the losses elsewhere suggest a more bearish undercurrent.  The sharp shift away from Small Caps likely signals the end of the Small Cap rally. Look for Large Caps to attract what scraps are left for bulls to feast on.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. You can read what others are saying about Zignals on Investimonials.com.

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