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Three Reasons Why You Should Be Watching Semiconductor Stocks


These could be chips without dips.

As I settle in today's trading while trying to shake off the dual forces stemming from my absence in watching the tape for the last 2 trading sessions and the "withdrawal" that always occurs from visiting Minyanville headquarters, here are the levels in S&P 500 that I'm watching.

With today's gap down, the S&P 500 is at the 200-DMA and 50-DMA support (simple, not exponential). A close below this all-important level will leave it vulnerable to finding support at the 880 level.

As I opined earlier, over the course of the next 2 months, the 200-day moving average will start factoring in the massive decline in September and October of 2008, so the support provided by the 200-dma will move successively lower. Something to keep in mind since S&P 500 can move lower in point terms and still be at "support."

This is more important for the other indexes like the Dow Transports and Russell 2000 (that fell about 40% in 40 trading days back then).

Click here to enlarge.

In 1971, Albert Mehrabian said that regular communication can be broken down thus: 7% of the content is understood in spoken words; 38% of the content is understood through voice tone; and 55% of the content is understood via general body language.
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No positions in stocks mentioned.

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