Nasdaq Envy:

Below is a chart of the major world ETFs and their performance YTD (provided by IBD). As one can see the Nasdaq is clearly in the drivers seat (notice laggards South Korea, Mexico and South Africa DOWN YTD), although the RSX is just fractionally behind. To the left one can see the weekly performance from last week, and it was a swoon. How quickly things can change in the psyche of investors. This week the Nasdaq is nearly 400 handles from intraweek lows, and although it is a good reversal, bears will point out this is the type of loose, volatile action that is displayed near market tops. Thursday the tech rich index CLOSED an upside gap, but did finish above its 50 day SMA and the round 8000 number. Is it just typical noisy August behavior? My thoughts are just how international market participants crave our treasuries, sending yields spiraling lower, the same can be said for our equities. They continue to be the best in a somewhat soft bunch, and for that reason capital will continue to flow into both of those domestic asset classes.

Semiconductors To Make A Stand Here?

It is hard to take away much from the SMH chart below. Depending on your biases it can flatter either the bulls or bears. The ETF showed nice action POST breakout from a cup with handle, just what you want to see. But the bears have had the last laugh as the fund undercut the breakout trigger, often a red flag (volume the last 3 days that it gained ground have been less with each successive day). I prefer to trade individual names in the space, and that is where ones focus should be. AMD recorded a huge session today, but will it be stopped on a WEEKLY basis near the 34-35 number for the eighth time since last September tomorrow? Will its gain be at INTC’s expense as it has dropped 3.1%, while AMD has soared by 15.2% with one day left this week? IPHI is attempting to register an 11 week winning streak depending on tomorrow CLOSE. 

Examples:

Japan via the EWJ is LOWER by 8% over the last one year period, while the S&P 500 is up 3% during the same time frame (thought it would be more). Looking at the top 3 components in the ETF, to me the best looking chart is that of SNE. Below is how the name was profiled in our 8/2 Technology Note. For the week thus far SNE is higher by 2.3% heading into Friday, while TM is up fractionally and SFTBY is down 4.8%. SNE is now higher 14 of the last 19 weeks, and volume trends are firm. It recently retested a cup with handle breakout and filled in a gap. Things are looking up for Sony, with this technical “cluster of evidence”.

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