Summary
The stock market stormed back on Monday, recovering a large portion of Friday’s meltdown. The S&P 500 popped 1.6%, while the Nasdaq and Nasdaq 100 ripped higher by 2.2%. Small-caps also had a nice recovery, with the Russell 2000 leaping 2.8%. In no surprise, Information Technology led, aided by more than 4% gains in semiconductors (SOXX and SMH). Two of the three trillion-dollar chip stocks soared, with AVGO (+10%) and TSM (+8%) providing the excitement. Meanwhile, we get our first glimpse of third-quarter results this week. Bullishly, the Nasdaq and the QQQ recaptured their 21-day exponential moving averages (EMAs), but hit resistance from their 13-day EMAs. The S&P 500 closed slightly above its 21-day EMA (something to watch in the days ahead). At the intraday highs on Monday, the three major indices all retraced 61.8% of Friday’s decline. That suggests they will at least meet their prior all-time highs and possibly exceed them. If the market rolls over from here and Friday was not a one-day wonder, the S&P 500 has initial support at 6,540 from its rising 50-day average. The rising 13-week EMA is at 6,500 and the 21-week EMA lies at 6,375. If there is a break lower, there is
