It was a good day for indices, with the S&P rallying off its 200-day MA, and the Semiconductor Index breaking upside from its wedge.
The Semiconductor Index closed with a ‘Death Cross' between 50-day and 200-day MAs, while the breakout generated some bullish technical signals. The risk:reward remains good, even for a push just to the 50-day MA, and pullbacks will help lower this risk.
The S&P bounce was not as quite as big as relative gain in the Semiconductor Index, but the 200-day MA did in the end offer its support for the third time. It will quickly find itself tackling resistance at its 2,114.
The Nasdaq rallied to a point more or less smack bang in the middle of its range. Friday's action finished with a doji at support and this looks to be enough to keep buyers interested.
The Russell 2000 rallied over its 200-day MA. Given what's happened before, watch action on the next test of 1,240. There should be enough in this recovery to make this test. It still feels bearish on the longer time interval, but for now, bulls have something to work with.
Tomorrow, bulls can keep their eye on the Semiconductor Index. This looks like the index which would bring the best long term gains, but let the market do the driving. Shorts will still be in profit taking mode until indices approach trading rage highs.
