Daily Market Commentary: Conflicting Day
It was a case of selling for many of the indices, with the exception of the semiconductor index. The semiconductor index has been a long time underperformer, but today it held on to its breakout with a modest gain. Technicals are also in good shape. If there was a marker as to where to place your bets for a Christmas rally, Tech would look to be the place to be.
Unfortunately, the Tech averages didn't pay much attention to the Semiconductor index. Today finished with a 'bull trap,' which is a decent enough shorting opportunity with a stop on a move to new highs. Again, the trend is with the bulls, so shorts would not want to cling on to a losing position for too long.
The S&P hasn't succumbed to the same. It's holding its breakout, with the 20-day MA playing as support. While it's above its 20-day MA it's a long side play. However, technicals are shifting bear side - leading with a MACD trigger 'sell'.
The Russell 2000 digested its losses from yesterday, finishing on a thick line of support. It too has a 20-day MA to look too for support.
A tricky situation for traders. Short term would suggest bears have the edge, but the broader bullish trend can't be ignored. The narrow action in Tech with 'bull traps' is a natural short play; but the semiconductor index will do its bit to ruin that one. Long players could play for a relief bounce in the Russell 2000; stop goes on close below 20-day MA.
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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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Unfortunately, the Tech averages didn't pay much attention to the Semiconductor index. Today finished with a 'bull trap,' which is a decent enough shorting opportunity with a stop on a move to new highs. Again, the trend is with the bulls, so shorts would not want to cling on to a losing position for too long.
The S&P hasn't succumbed to the same. It's holding its breakout, with the 20-day MA playing as support. While it's above its 20-day MA it's a long side play. However, technicals are shifting bear side - leading with a MACD trigger 'sell'.
The Russell 2000 digested its losses from yesterday, finishing on a thick line of support. It too has a 20-day MA to look too for support.
A tricky situation for traders. Short term would suggest bears have the edge, but the broader bullish trend can't be ignored. The narrow action in Tech with 'bull traps' is a natural short play; but the semiconductor index will do its bit to ruin that one. Long players could play for a relief bounce in the Russell 2000; stop goes on close below 20-day MA.
All Contributions Welcome - Thank You!
Follow Me on Twitter
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.
JOIN ZIGNALS TODAY - IT'S FREE!
