Wednesday, December 12, 2012

Morning Market Analysis

The semiconductor sector has been consolidating in a symmetrical triangle pattern for most of the year.  However, this week, prices have broken through upside resistance on a buy signal from the weekly MACD.  The good news in this char is semis are a decent leading indicator for trading.

The daily SMH chart shows that prices have broken downside resistance in late November.  Prices have been rising since than, moving through the 200 day EMA and trading above all the EMAs.  Also note the rising MACD.   The chart shows upside resistance about 33.25 and 33.75.

The daily chart of the QQQs puts recent market action into perspective. First, we see the 13% drop from late September to mid-November.  Since then, prices have rebounded to the 50% level from the sell-off.  Now, prices are above the 200 day EMA as are the shorter EMAs.   

The weekly German market chart shows that prices have moved above the 61.8% Fibonacci level -- an area that has provided upside resistance for most of the year.  Notice the especially strong CMF reading, indicating money is moving into the market.  German, being a safe haven country in Europe, should be absorbing safety flows.

The weekly emerging market ETF is still trading between the 21/22 and 27/28 area.