S&P breaks rising support, Nasdaq sits on support

I doubt anyone wants to read about anything else but Gamestop stock, but the broader market marches on.   The S&P is trading at its 50-day MA after undercutting rising support on Friday.  There was a break of the mid-line in Stochastics, but technicals are not fully bearish with On-Balance-Volume still to flag a 'sell' trigger.  On a positive note, the S&P is making up ground against the Russell 2000.

Sellers step in to create some distance from recent swing highs

Semiconductors suffered heavy selling which broke support of the rising wedge in a 5% loss. This had obvious knock on effects to other indices such as the Nasdaq and S&P. It's too early to say if this is the start of a major swing high or just a heavier than expected selling day. The key thing from the Semiconductor Index is the gap down from the sell off, breaching support and the 20-day MA undercut. If this is a significant breakdown, then the gap can't be closed (and really, shouldn't be challenged). It's going to take a few weeks for this to recover, even if it does recover. Semiconductors have come a long way in the last five years, but now looks a time for a period of sideways action. 

Prices drift modestly higher on light volume

There was a relatively wide intraday range day for markets, but by the close of business most indices were back where they started.  The biggest gain came from the Nasdaq, but it closed with a doji at a swing high. This is typically a neutral candlestick, but can also mark a reversal. The Nasdaq is starting to run a relative performance advantage over the Russell 2000.

Minor losses for Small Caps offset by small gains for Large Caps

No great change for indices again. There could be an argument for a possible acceleration in the bullish trend for Large Caps and Tech Indices, but its not exactly convincing. On a positive front, technicals are in good shape across all indices. The Nasdaq is in the process of building a relative performance advantage against Small Caps by the acceleration in the bullish trend.

Bullish Trend Continues

What Friday took away, Tuesday gives back. The modest trend which was established in November remains in play. No index challenged its most recent swing high, so really there was no net change in the overall picture for indices. The Nasdaq ($COMPQ) is still holding to its MACD trigger 'sell', but other technicals are net positive.

Friday losses were small but will likely lead to support tests

We have a couple of indices likely in the process of testing rising support trendlines. The Nasdaq is running along a support trendline which also closely maps the 20-day MA. 

Gains in Tech and Large Caps don't yet challenge prior swing highs

There wasn't a whole lot to today's action. Small gains in the Nasdaq and S&P were unable to return a challenge on the prior swing high, while yesterday's new high in the Russell 2000 saw a minor loss.  Buying volume for the Nasdaq was lighter than normal and there was already a 'sell' trigger in the MACD. In addition, relative performance remained poor.


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