NASDAQ Breaches Support

The NASDAQ has breached prior support of 2069 and is starting to freak out a lot of folks. The selling over the last week or so has been relentless. In fact, virtually the entire up move that the market made since the London Terrorist attacks has been wiped out (ethically speaking it seems rather fitting).

When the stock market retests prior support it is allowed to briefly fall below it without destroying the chances of a successful retest. However, if the internals still drag and the breach of support is too significant, then the bottoming process has to start all over again. Currently, the NASDAQ has not done enough damage to ruin the chances of this being a successful retest. As painful as it feels, we are maintaining our positive outlook on the market and are using this weakness to further scale into Semiconductor exposure.

The Fed minutes are coming out at 2pm. We expect any deviation from the hawkish stance to possibly ignite a rally. Maximum uncertainty for the market is between 1 and 2pm and therefore a potential entry point for long-side trades.

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