SEMICONDUCTOR ISHARES BOUNCE OFF CHART SUPPORT -- WITH APPLIED MATERIALS AND LAM RESEARCH IN THE LEAD -- INTERNET STOCKS LEAD COMMUNICATION SECTOR HIGHER -- FACEBOOK AND GOOGLE ARE HOLDING MOVING AVERAGE LINES
SEMICONDUCTOR ISHARES BOUNCE OFF CHART SUPPORT... Technology stocks are helping lead today's stock rebound. With help from semiconductors. Chart 1 shows the PHLX Semiconductor iShares (SOXX) bouncing off potential chart support along its August/September highs near 190. Its 9-day RSI line (upper box) is also bouncing from oversold territory. It would be encouraging to see the SOXX regain its 50-day average. Two of today's chip leaders are shown below. Chart 2 shows Lam Research (LRCX) bouncing off its 50-day line. While Chart 3 shows Applied Materials (AMAT) finding support at its 200-day line.
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Chart 1
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Chart 2
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Chart 3
INTERNET STOCKS LEAD COMMUNICATIONS HIGHER ... Communication stocks are today's strongest sector. Chart 4 shows the Communication SPDR (XLC) trading back over its 50-day moving average. It's being led higher by Internet stocks. Chart 5 shows Facebook (FB) bouncing off its 50-day line. Chart 6 shows Alphabet (GOOGL) trying to regain its 200-day line. Take-Two Interactive Software (TTWO) is up more than 4% to lead the Internet group higher.
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Chart 4
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Chart 5
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Chart 6
DOW TRIES TO HOLD ITS 200-DAY LINE ... The Dow Industrials slipped below their 200-day average on Monday. Chart 7, however, shows the Dow trading back over its red line for the second day in a row. It's also trying to find support along its March lows just above 25000. In addition, its more sensitive 9-day RSI line (upper box) is bouncing from oversold territory below 30. The Dow is undergoing the first serious test of its 2019 uptrend. This would be good spot for it to make a stand.
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Chart 7
VIX INDEX IS BACK BELOW 20... Chart 8 shows the CBOE Volatility (VIX) Index falling back below 20 for the second day in a row. Previous messages have pointed out that a decisive move by the VIX over 20 has usually been associated with more serious stock market pullbacks. Readings below 20 are more supportive to stocks and remove a threat to the market's uptrend.
