Profit Taking Sweeps Tech While Large Caps Gain

There was a clear shift in market behaviour as Large Caps enjoyed the fruit of renewed buying as Tech indices (Semiconductors mostly) felt the heat of profit taking. After weeks of tight gains in the Semiconductor Index it was an easy turn for profit takers to come in and push the market down; in the absence of logical support it was going to be a hard task to pinpoint where potential depend may lurk outside of 1,150.  The 50-day MA may provide one such escape but there isn't a whole lot to suggest it may play as support.

Large Caps (Financials) Make The Jump Against Tech

In the end, it wasn't Tech to surprise with an acceleration past its bullish rising channel but the S&P and Dow with fresh breakouts. A confluence of positive data  fueled the advance in Large Caps along with a dollop of short covering.  Tuesday's action ranks as a breakout in this indices and brings into play new support levels should profit-takers come in to take advantage of the gains.  The only downside for the S&P was the continued downtrend in relative performance against Small Caps - suggesting the real money is flowing into more speculative issues.

Nasdaq Tags Channel Resistance

The post-Thanksgiving recovery offered some modest profit taking with Semiconductors experiencing the worst of the selling but the Nasdaq tagging resistance before reversing.  It offered the clearest 'sell'/profit take trigger after the August support 'buy' signal. Given action in other indices it could break above resistance, accelerating gains, but taking some profits here would be prudent.

Happy Thanksgiving :) Friday Should Be A Winner

Thanksgiving Wednesday was never going to generate an exciting day but it was good to see early week gains retained. Upcoming Thanksgiving Friday is typically a day when Junior traders go wild and decent gains are posted - even if trading volume is light. With last week's lead action I wouldn't be surprised if this pattern was to repeat. Tech Indices have been leading the charge in recent days and I would look to the Nasdaq and Nasdaq 100 to be the primary chargers on Friday. Technicals are firmly in the green.

Russell 2000 and Semiconductor New Highs / S&P Breaks

The S&P broke higher to confirm a 'bear trap' and also closed at a new all-time high. Volume climbed to register an accumulation day but there were further losses in relative performance and continued losses in the MACD.

Russell 2000 Clears Resistance

The Russell 2000 followed through higher with a break of resistance and a bullish cross of mid-line stochastics. The 'bear trap' follow through is for new all-time highs. Watch for a MACD trigger 'buy' to support the 'bull flag' break.

Russell 2000 Makes It Back to 'Bull Flag' Resistance Leaving 'Bear Trap' Behind

Over the course of Thursday and Friday the Russell 2000 reversed what had looked like a runaway breakdown into a counter rally and potential breakout. Now it's the time for shorts, FOMO longs and existing longs to pressure resistance. Action over the last two days of the week was particularly tasty particularly if you are looking for an extension of the August-October rally. Better still, there isn't a whole lot of competition from other indices for trading opportunities. Long risk measured from a stop below 1,454.


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