Late Rallies Recover Day’s Losses

It was a late morning reversal which clawed back losses from the open. Markets still finished with a close below the open, but it was looking ugly at the start of the day.

The S&P  finished with a bullish ‘hammer’ just below the neckline. On the positive front, it may be rejecting the neckline breakdown I have talked about over the last couple of days. On the negative front, the failure to recover the neckline suggests bears maintain control.

The Nasdaq is still holding on to May’s swing low, but today’s doji is a neutral candlestick which looks week given it sits at such support. All other technicals are negative.

The Russell 2000 has already lost the nearest swing low, so today’s bullish ‘hammer’ may suggest a swing low; however, technicals are not oversold enough to suggest the index is there. Relative performance has only recently shifted negative, so the recovery may be a slow one.

The Semiconductor Index has another positive day. While it didn’t register a gain, it did finish near yesterday’s highs. This index is working what looks like a strong swing low, part of a new long-term trend anchored by February’s swing low? Long term buyers should be giving Semiconductor stocks serious attention.

For tomorrow, keep an eye on the open. A positive start (gap higher) could firm up a tradable swing low. Indices are nicely placed for a rally – Semiconductors in particular.