"Cause You Were Mine For The Summer"

---

Summer Love by One Direction

My favorite sector has been semiconductors for nearly 3 years now. I haven’t been shy about it. In fact, I have been quite vocal (in written and tweet form) and my loyal readers can testify to that.

Why do I mention it now? Because, the performance on Thursday was a technical dream. First, the low was 49.64 with the July calendar low 49.65-darn near picture perfect for finding support.

Secondly, because I wrote about the brick wall high earlier this week that would be negated if it cleared (intraday counts too) 50.53, which it did.

Third, it held the runaway gap on from July 1^st, the same day it made the calendar range low. And finally, because it cleared the 10 DMA closing above it.

What has to happen now? Semiconductors must defend 50.53 to end the week and close above.

My other “tells” of equal interest. Interest rates-TLTs could not clear key resistance and although still above the 50 DMA, the decline end of day still puts their future at risk-especially with talk of a possible Fed Funds rate rise down the road.

The Russell 2000s held the 50 DMA, tested 116 and retreated but still closed weakest percentage wise. Therefore, Friday should be relatively decisive concerning this down move. If, TLTs fail, SMHs hold and IWM crosses 116-summer love prevails!

S&P 500 (SPY) Over 197.11 clears a lot of congestion. A weekly hold over 196.13 also good

Russell 2000 (IWM) Held the 50 DMA, filled the gap to 116.05-there’s your range to watch

Dow (DIA) Over today’s high or around 169 looks good. Otherwise, 168.23 is good support to hold

Nasdaq (QQQ) 94.45 pivotal, over 95.26 good, under 94.20 defensive

XLF (Financials) Tested and held the 50 DMA

KRE (Regional Banks) 39.11 is the key support

IYT (Transportation) 147.25 pivotal

IYR (Real Estate) Had a good day with the low rates

GLD Gapped higher so will see if this is breakaway or not

USO (US Oil Fund) If holds 37.90 that is better longer term

TAN (Guggenheim Solar Energy) Held the major moving averages. Makes this still a contender

TBT (Ultrashort Lehman 20+ Year Treasuries) TLT 112.60 first area to defend-then the 50 DMA. Flipside, 113.82 to clear

EEM (Emerging Markets) Still worth watching

FXI (China Large Cap Fund) 37.95 is now a good point for entry