There was no acceleration in the losses for the Russel 2000 and Semiconductor Index but today it was the turn of the S&P to break from its ‘bear flag’. It was more of a technical break than an absolute loss but given net technical weakness, it must be respected.
The Dow also broke from its ‘bear flag’but the 200-day MA is available to lend support (already lost for the S&P). Other technicals are net bearish.
Tech Indices are caught in a mixed zone. Some may argue it has already lost ‘bear flag’ support; others may view it at continued support.
The Russell 2000 is down trading at the recent swing low. Aggressive buyers could go long a move above 1,551 with a stop on a loss of 1,530.
For tomorrow, today’s indecision probably reflects a reluctance for shorts to add to their positions and for bulls to ‘sell’ – this leaves the next move for buyers to come in and for shorts to cover. The basis for a rally, and maybe a challenge of prior highs, looks to be in place. If you are a short, don’t get greedy. If the ‘bear flags’ are to play to form then decent downside has to come soon, otherwise, it will trade out flat (and into a sideways consolidation).
