There were some sharp drops in Asian trading on Wednesday following the decision by the Bank of China to increase reserves from the banking system because it is becoming concerned about emerging evidence of property and asset bubbles.

The Shanghai Exchange ended with a more than 3% drop and the Hang Seng Index in Hong Kong fell back by 2.6%.

The chart below reveals the uncanny ability for key levels in Ichimoku cloud formations to act as support/resistance. The intraday low in today’s session tagged the base of the cloud formation almost exactly and should now offer some support. Notably the index also closed below its 50-day EMA.



The Nasdaq 100 (NDX) outperformed on the downside in yesterday’s US session but looks to be well supported at the level drawn on the chart.



As anticipated in my commentary from January 8, the semiconductor sector was one of the weakest sectors in yesterday’s trading.



Goldman Sachs (GS) has been displaying reversal behavior after breaking away from the descending wedge formation which I discussed for the investment banks earlier this week. This should be monitored closely as any continued weakness leading to a violation of the $160 level would suggest that the early January rally may have been a carefully orchestrated "fake-out".



Here is my comment on AMD from last week.

Advanced Micro Devices (AMD) is a constituent of XSD and, unsurprisingly, is displaying similar characteristics to the sector fund.



Adobe (ADBE) dropped below its 50-day EMA yesterday without evidence of any aggressive selling pressure.



Google (GOOG) was also discussed here last week and again, as anticipated, has retreated almost to its 50-day EMA where one would expect to find some buying support.



Hershey (HSY) surged ahead yesterday breaking above a key trend line and all three moving averages on substantial volume. Follow-through should be expected in coming sessions.



Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market.