While markets experienced broad selling on Friday, it was semiconductors which took the brunt of sellers wrath on weak prospects for the sector. Unfortunately, given the importance of semiconductors at the heart of Technology and therefore, the global economy, there will likely be further repercussions going forward.
The near 7% loss in the Semiconductor Index paid no respect to daily support, opening up support levels on the weekly time frame. The 200-week MA has entered the 61.8% fib retracement zone and is a potential target for the months ahead.
Not surprisingly, Technology indices suffered a break of the August swing low, and cut through the 200-day MA too. However, given the loss in the semiconductor index I was surprised not to see more damage here. Selling volume did soar in confirmed distribution.
The S&P 500 didn't escape the selling, although the loss of just over 1% wasn't too damaging. The index finished the day on its 200-day MA, a support level for bulls to work on today, Monday.
The Russell 2000 put some distance on the break of 1,090 support. A move back to 1,090 will off an entry opportunity for shorts with stops on a move above 1,100.
As a final mention, losses in NASDAQ breadth accelerated. The Percentage of NASDAQ Stocks above the 50-day MA has dropped into the teens at just 16%. It has crossed below levels typical of a bounce; so a bounce likely isn't far away.
The NASDAQ Summation Index is very close to a strong bounce zone (below -800), although a cross of the 3- and 5-day EMA would be a better confirmation marker for a swing low.
Monday is positioned for a bounce, but it will take more than one day of gain to confirm a low. Aggressive longs may best wait for the first hour of action to see if a low is on the cards, or if the selling still has legs.