Strength In Semiconductors Is The Key To Setting New Highs In The Stock Market

Strength In Semiconductors Is The Key To Setting New Highs In The Stock Market

(Photo by Justin Sullivan) The Dow Jones Industrial Average (DJI) gapped above its 50-day simple moving averages and has a neutral weekly chart. The S&P 500 Index (SPX) also gapped above its 50-day SMA and has a neutral weekly chart. The Nasdaq Composite (IXIC) is on the cusp of its 50-day SMA and has a neutral weekly chart. The Dow Jones Transport Average (DJT) is well above its 50-day SMA and has a positive weekly chart. The Russell 2000 Index (RUT) is above its 50-day and 200-day SMAs, which are converged at 2, 234, 17 and 2, 230. 64, respectively. This week's strength is preventing the formation of a death cross. The Philadelphia Semiconductor Index (SOX) held its 200-day SMA at 3, 171. 51 on October 12. It's still below its 50-day SMA at 3, 343. 89. Its weekly chart remains negative. The SOX is a major warning for the stock market. If the SOX turns positive the upside is to new highs. The monthly risky levels are 37, 751 on the Dow 30; 4, 730. 17 on the S&P 500; 15, 259 Nasdaq; 17, 038 on Dow Transports; 2, 409 on the Russell 2000; and 3, 584 on the