07/28/11 Market Action and Semiconductors

The major markets (IWM, QQQ,  SPY) were under some continued sell pressure. The market continues to be choppy. I am currently in mostly cash as I feel risk is high in this market. As I pointed out in an earlier post the long term trend is still higher, but in the intermediate term neither the buyers or sellers have been able to maintain control.

The price action in SMH (etf for semiconductors) adds to my assessment that there is more risk in this environment (see figure 1). The 32 level on the SMH looks vunerable and a break of that level could lead to further downside.

Overall I am not seeing many great swing trade setups currently. I plan on waiting for the price action to improve before taking a trade.

Figure 1.