Daily Market Commentary: Quiet Day For Markets, But Big Day For Semiconductors

No shocks to the system in what amounted to a quiet day for the indices. The real winner was the semiconductor index, it added nearly 1% as it posted a new 52-week high. This strength should filter down to the Nasdaq and Nasdaq 100, although today was quiet for the latter indices.  The measured move target for the semiconductor index is 650.

The Nasdaq opened weak but was able to recover some of its losses by the close. There was a 'sell' trigger for On-Balance-Volume, although this trend has flattened since Match, leaving plenty of whipsaw signals.  The index looks to be forming a bullish flag at what could turn out to be the right shoulder of a bearish head-and-shoulder reversal. If it can break higher it will go a long way towards negating the head-and-shoulder reversal.

The S&P finished with a narrow day which could offer a swing trade opportunity on a break of Tuesday's high/low - with a stop on the flip side.

The Russell 2000 remains the value proposition. Two spike lows to the 200-day MA over the last couple of days show bulls are prepared to defend, although they won't defend forever. Buyers will need to follow through with a push above 1,144 by the weeks end if buying momentum is to be maintained.

Momentum players should focus on the semiconductor index, swing traders look to the S&P, and value players keep a close eye on the Russell 2000.


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