Bull Traps confirmed for Nasdaq 100 and Semiconductor Index

Semiconductors confirmed a 'bull trap' as it failed to reverse Friday's losses. The index hasn't yet managed an initial test of 20-day MA support but technicals have started to turn bearish with the CCI 'sell' trigger. The MACD looks likely to switch to a 'sell' trigger in the next couple of days.

The Nasdaq 100 also posted a 'bull trap' as it dropped back inside it's rising channel on Friday. The next target is 20-day MA, but more likely is a push back to channel support.

There was a modest improvement in the Russell 2000, although the recovery was initiated below the 50-day MA. Despite the small recovery, technicals turned net bearish as relative (under-)performance against the indices' peers widened.

The S&P finished with a neutral doji on its 20-day MA. Volume was well down on Friday's so this was a quiet day for the index with no edge offered to either side.

For Tuesday it will be a question as to whether the 'bull traps' in the Nasdaq 100 and Semiconductor will start to expand out. Should we start to see a broadening of the weakness in Tech indices it will only increase the pressure on whatever recovery the Russell 2000 tried today.  Eventually, this weakness will spread to Large Cap indices, but we are not there yet.

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

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