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Semiconductor Surge Sparks Nasdaq 100 Breakout; Dow Jones in Bull Trap Territory

Published 12/12/2023, 08:14
NDX
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US500
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DJI
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US2000
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IWM
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IXIC
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SOX
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Bulls came into the week with a small edge, but it was left to Semiconductors to push beyond its 'bull flag' and July swing high resistance. Gains in the Semiconductor Index coincided with a new MACD trigger 'buy' and an acceleration in relative performance to the Nasdaq 100.

SOX-Daily Chart

The Dow Industrial ($INDU) pushed above last week's consolidation. Having committed to this break, we need to watch for a potential 'bull trap' as this is a breakout coming off an extend rally of nearly 4,000 points.

INDU-Daily Chart

The Russell 2000 (IWM) is on course to test the August swing high around $191. I would be looking for some sideways action should the index make it to this resistance level.

IWM-Daily Chart

The Nasdaq poked its head above resistance, but it's only an edge breakout. This could very easily drift back into last week's consolidation, setting up a 'bull trap' and a possible move back to fill the November gap.

COMPQ-Daily Chart

The S&P 500 has done a little more to set itself past the 2-week consolidation and the August swing high.

However, it hasn't reversed the MACD trigger 'sell'; other technicals are positive. While the S&P 500 is pushing beyond its trading range it is losing ground against the Russell 2000.

SPX-Daily Chart

For today, I would be looking for some weakness, particularly if there are gaps higher for large-cap indexes. I would edge a little more bullish for the Russell 2000 ($IWM), chiefly because it hasn't enjoyed the same level of gains as the other indexes.

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