Semiconductors On Fire, Know This Resistance Level
Today, the important semiconductor stocks are trading sharply higher. When the semiconductor stocks rally higher it is usually a good sign for the technology sector. The semiconductor sector is viewed by many traders as a leading indicator for the NASDAQ Composite. When the semiconductor sector lags the NASDAQ Composite it is usually a warning sign that the NASDAQ Composite will be weak in the future.
Many of the leading semiconductor stocks continue to struggle to catch a bid higher. The important and highly followed Merrill Lynch Semiconductors HOLDRS ETF (NYSEARCA:SMH) is trading lower by 0.12 cents to $44.45 a share. Short term traders should watch for intra-day support around the $32.20 and $32.90 levels.
This morning, the big three leading technology stocks are all trading lower. They are Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN), and Google Inc (NASDAQ:GOOG). These three stocks will usually dominate the action in the NASDAQ Composite and the NASDAQ 100 Index, however, today it is the semiconductor stocks that are keeping the tech heavy index in the green.
The markets are hovering slightly lower on the trading day. The SPDR S&P 500 ETF (NYSEARCA:SPY) is trading at $134.58, -0.21 (-0.16%). While the markets remain overbought, the free money policy of the Federal Reserve and light volume propping has created the best start in 25 years in the market. The scary aspect of this is that the rocket will eventually run out of fuel and fall to earth quickly.
The Dollar, Weak Earnings Indicate A Top is Near for the S&P 500
This morning, the Market Vectors Semiconductor ETF (NYSEARCA:SMH) is trading higher by 0.21 cents to $31.80 a share. The semiconductor sectors continue to struggle around the daily chart 200 moving average. This tells us that this important sector is showing weak relative strength when compared to the major stock market indexes.