Daily Market Commentary: Gains Held. Semiconductors Recover.

Large Caps made their move yesterday, this time, it was the turn of Tech indices to post gains. The semiconductor index hasn't quite negated the bearish engulfing pattern, but it has gone a long way to making up its loss. The 'bull trap' is a secondary level to take out. However, both bearish engulfing and 'bull trap' could be taken out Thursday.


Gains in the semiconductor index passed through to the Nasdaq and Nasdaq 100. Volume was lighter, but there was a new closing multi-year high for the Nasdaq: look for a measured move to 3,680.


The Russell 2000 wasn't left out of the fun as it logged yet another up day. There hasn't been a significant down day for this index since the June swing low. The next sell off day could be a big one simply because there hasn't been one since the swing low was confirmed.


The S&P had little to show on the day. The breakout is still valid but there was little else to say beside this.


Shorts are likely itching to get involved, but natural entry points have nearly all been surpassed. The semiconductor index, despite today's gain, is offering a short side play with a cover on a break of the June high.


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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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