Markets were underwater the entire session Tuesday and the Nasdaq and S&P 500 fell by .8 and .7% and the Russell 2000 lost 1.1%. The chart I am most focused upon is the S&P 500 as it is attempting to break above a bull flag trigger which is eased above Monday, and one does not want to see a rapid breakdown of the move. The best bulls could hope for would be some consolidation here and then a ramp higher. Keep in mind it is assuming leadership with the industrial names displaying zest. Technology has certainly been roughened up recently but it is way to premature to declare the sector dead. Semiconductors should be watched with a close eye hear as the SMH has now declined 6 of the last 8 days following the bearish engulfing candle on 6/9 in the largest daily volume of ’17 thus far, occurring right at the very round 90 figure. A number of names in the space warrant at least caution, if not trimming positions. KLAC sliced below its 50 day SMA last week, a line it has been above since last October, and although it is not a major technical foul, it is if it is not quickly recaptured. It tried Monday to climb back above, and did so fractionally, but it lost 3.4% Tuesday and the line is dealing with the very round par number as well. QRVO is a fine example of PRICE confirmation and below is the chart and how it appeared in our Monday 6/5 Game Plan. The trigger was never taken out on a daily or CLOSING basis and is now 11% off recent 52 week highs. Other stocks in the space have been hit harder with the likes of AMBA, UCTT and ICHR off by 35, 23 and 22% from their own most recent 52 week highs. The two big stories of the day were the healthcare being the best performing group and trying to run with the baton regarding leadership and energy slumping yet again and the XLE lost 1.3%, but did record a bullish hammer candle. I will not be touching the ETF however as it continues its nasty spiral lower now 17% recent highs and the fund has gained ground just 9 weeks this year so far.
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