Daily Market Commentary: Semiconductors Breakout?

The late day flurry of buying added some gloss to what had been, up 'til then, a struggle. The lack of volume tempered the gain but the buying did occur at channel support.

Clearest support was found in the S&P. The rising channel played well as support although the declining 20-day MA is providing supply pressure.

Buying in the Nasdaq kicked off before channel support was reached. Unlike the S&P, its 20-day MA is ticking higher, although the rally wasn't enough to finish with a close above the 20-day MA.

The real action was concentrated in the semiconductors. Unlike the aforementioned indices the action is concentrated around channel resistance, not support. Today's close may be enough to register as a breakout but there was a sharp gain in relative strength to the Nasdaq 100. May's decline may now be at an end.

The focus for tomorrow should be on semiconductors. Gains in other indices are unlikely to change the big picture, but a gain in semiconductors would do a lot to kick start leadership for the next rally. Continued gains in the semiconductor index would spill over to the Nasdaq and Nasdaq 100.