CHIPS LEADING MARKET HIGHER -- S&P 500 TESTING 50-DAY AVERAGE -- AMD AND TERADYNE ARE LEADERS

SEMICONDUCTOR ISHARES TESTING 50-DAY AVERAGE... As it did last week, the semiconductor group is leading the Nasdaq (and the rest of the market) higher again. Chart 1 shows the day's strongest ETF -- the Semiconductor iShares -- challenging their 50-day moving average. A decisive close over that resistance line would be a positive sign for chip stocks, the Nasdaq, and the rest of the market. That's because technology leadership is a big plus for the market.

Chart 1

S&P 500 SPDRS TESTING 50-DAY LINE... Earlier in the week I showed the S&P 600 Small Cap and the S&P 400 Mid Cap Indexes rising above their 50-day averages and suggested that the S&P 500 Large Cap Index would soon do the same. It's trying to do that today. Chart 2 shows the S&P 500 SPDRs trading at a four-week high and testing the 50-day line. A close above that resistance barrier would confirm that large cap stocks are following smaller stocks higher.

Chart 2

AMD AND TERADYNE ARE S&P LEADERS... In another demonstration of technology leadership, two of the day's strongest S&P 500 stocks are Advanced Micro Devices and Teradyne. Both are also part of the semiconductor group. AMD is trading at a two-month high and is moving up to challenge its January high. Teradyne is trading over its 50-day moving average. Some other S&P 500 leaders are Calpine, Computer Associates, and Sprint PCS.

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