Daily Market Commentary: 20-day Moving Averages Hold For Now
Buyers made inroads into yesterday's relatively mild losses. The point of defense were 20-day MAs of the S&P, Dow, Nasdaq and Nasdaq 100. The Russell 2000 found its love at the 50-day MA, although the 20-day MA is only a few points above it. While this offers near term upside opportunity, it has been rare for the 20-day MA to act as a launch point for a longer rally. Don't be surprised if this MA is again revisited next week.
The S&P has perhaps the most to gain given the significance of 1,987 support as it looks to push beyond the psychological 2,000 level. If there is a concern it's that technicals are favouring an expansion of the weakness: a move to the 50-day MA may be needed first.
The Nasdaq is also seeing the start of technical weakness, but Tech averages have had a good run since the start of August. It will take more than a nascent MACD trigger 'sell' to scare Tech shareholders out of their stocks.
The Russell 2000 had a good defensive stand at its 50-day MA. The trade off is that it has lost channel support. However, I would consider the hold of the 50-day MA of greater significance than a channel break (from within a larger consolidation). I suspect this will evolve into a new, broader rising channel.
As a final mention, the Semiconductor index finished with a doji, close enough to resistance to suggest another challenge of this supply is on the way. Semiconductors look poised for a nice run. Probably from a rush to new iPhone 6s!
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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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The S&P has perhaps the most to gain given the significance of 1,987 support as it looks to push beyond the psychological 2,000 level. If there is a concern it's that technicals are favouring an expansion of the weakness: a move to the 50-day MA may be needed first.
The Nasdaq is also seeing the start of technical weakness, but Tech averages have had a good run since the start of August. It will take more than a nascent MACD trigger 'sell' to scare Tech shareholders out of their stocks.
The Russell 2000 had a good defensive stand at its 50-day MA. The trade off is that it has lost channel support. However, I would consider the hold of the 50-day MA of greater significance than a channel break (from within a larger consolidation). I suspect this will evolve into a new, broader rising channel.
As a final mention, the Semiconductor index finished with a doji, close enough to resistance to suggest another challenge of this supply is on the way. Semiconductors look poised for a nice run. Probably from a rush to new iPhone 6s!
---
Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.
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!
