Dow Lead Indices But Recovery Rally Doesn't Reverse All Breakdowns - Chart of the Day Bonus

The Dow was the lead index on the day as it marked a new closing high and kept the rally on course to test its accelerated upper channel. Technicals are bullish with the exception of the MACD which is on the verge of a new 'buy' trigger.

The Nasdaq rallied following yesterday's breakdown but it didn't recover all of the losses generated by the breakdown. The index remains outside of the channel and technicals are still bearish with the index underperforming against Large Caps. Tomorrow is a chance to broaden the consolidation assuming the index rallies inside the bearish wedge.

The Russell 2000 did a little better in recovering 1,705 support but it was the bare minimum to regain such support. It was noted relative performance ticked lower despite the gain.

Chart of the day belongs to the Semiconductor Index and Copper chart.  Copper prices have been in decline all summer. The result has been a significant divergence to Semiconductor prices. Falling copper prices translates to weakening demand and this will have had adverse effect on semiconductors and tech stocks.

Tomorrow, watch how the breakdowns evolve. Longer term, prepare for a period of weakness in Seiconductors and Tech indices.

You've now read my opinion, next read Douglas' blog.

I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for "fallond".

If you are new to spread betting, here is a guide on position size based on eToro's system.

Share on StockTwits


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.

Follow Me on Twitter

Dr. Declan Fallon is a blogger who trades for education on eToro and can be copied for free. Investments are held in a pension fund as buy-and-hold.

Popular posts from this blog

Nasdaq primed for breakout

S&P "Bull Trap"?

"Black Candlesticks" are a concern for the S&P and Nasdaq


Show more