The Nasdaq experienced its second day of losses to bring it back down to 2018 channel support. This looks to be a critical time for the index given the convergence with the 20-day MA. There was a MACD trigger 'sell' and -DI/+DI 'sell' too to compound today's selling. On-Balance-Volume will turn negative tomorrow if there is another down day. From a trade perspective, buying support would look to be the favoured option but given this has come from a failed upside break from the wedge (inside the larger channel) the likelihood for a break lower and a move to test the 200-day MA would perhaps be favoured. Where longs will edge it is if there is a gap lower but a subsequent move back inside the channel.

There wasn't a whole lot to work with Tuesday. The only index showing potential was the Semiconductor Index; it managed to clear congestion from the last four days as it tagged resistance. While the resistance tag may be viewed as a shorting opportunity the move looks like one to drive a break of the triangle.

Before my vacation I had noted three indices to watch  undergoing support tests: Semiconductors, Nasdaq and Dow Jones Industrial Average had all presented buying opportunities. However, I had also thought these rallies would stall out when they got back to resistance - this did not prove to be the case.  With the exception of the Semiconductor Index (which did rally), all indices managed to post new highs for the summer. The Semiconductor Index is the one which may present a profit taking opportunity (or a potential shorting chance) as it approaches triangle resistance.  Given both the Nasdaq and Nasdaq 100 are at new multi-year highs and technicals for the Semiconductor Index are net bullish - and this rally begun from a 'bear trap' - chances are this will continue beyond 1,410 and go to challenge 1,440 and likely more.

On holidays until September 1st. How will the market be when I return? If you haven’t already  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. .