Indices Diverge

Apple's (AAPL) disappointment may have previously caused more of a reaction in the broader market, but today's response - outside of Tech - was muted. However, there was a divergence between Tech, and Large and Small Cap indices.

The S&P registered a small gain as 2,075 support held for a third day. Action has been very tight, but attempts on breaking 2,075 have been rebuffed, suggesting bulls are more likely to succeed in challenging and breaking all-time highs.

The Apple story has clouded things a little. The loss was enough to push the index away from 4,900 support (but not the 200-day MA) on higher volume distribution. There was also a bearish push in Rate-of-Change, along with an increase in the relative underperformance of this index to the S&P.  This would suggest bears have the edge, but another 'bear trap' would not surprise me.

The reason for this optimism comes from the Semiconductor Index which had a solid day and is shaping a bullish consolidation. If this breaks higher it will send out a very bullish message for all markets.

Small Caps have been knocking on the door of an upside break from a rising consolidation. They have already surpassed the 200-day MA. Only Rate-of-Change is giving bears any reason for hope - and hope in trading is never a good thing.

Tomorrow, keep an eye on Semiconductors; an upside break will likely bring other indices with it. A 'value buy' in the Nasdaq / Nasdaq 100 might be the prudent play.