Daily Market Commentary: Further Distribution

It was another day when early gains couldn't hold into the close of business. In further bad news, it was speculative Small Caps and Tech which took the brunt of the selling.  Having said, Large Caps couldn't hold on to their gains and closed at the day's lows.

The S&P is been drawn to the 200-day MA as it fights its relative position against Small Caps; at the moment it looks to be winning (which is bad news for those looking for a new leg to the rally).

The Nasdaq drifted away from declining support which suggests a possible acceleration in the decline.

Likewise for the Russell 2000, which confirmed its break of wedge support.

But the semiconductors suffered most with a substantial decline and break of the 200-day MA.  With the loss of the 200-day MA the next buying opportunity won't present itself until relative strength against the Nasdaq 100 swings back in its favour.

Certainly there will have been many buyers forced out of their positions by today's losses, especially for the Nasdaq, Russell 2000 and Semiconductor index. Does today represent a washout? A rapid rise tomorrow which takes out Wednesday's high would suggest so, but it would be hard to take a bullish stand from tomorrow's open.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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Daily Market Commentary: Selling Continues

It's just hard for buyers at the moment.  Given the 'Santa Rally' lasted into March it has become hard for sidelined money to commit and all too easy for holders of rally gains to sell. Volume climbed in confirmed distribution - a clear win for the sellers.

Large Caps have been the most resilient, although it was interesting to see Small Caps trying to edge the relative strength battle (which if successful would be bullish for the broader market).

The Nasdaq gave up on early promise to close near the lows of the day. Again, the index is hugging the declining support line, but the index is in need of a confidence boost.

Small Caps attempted to regain support and create a 'bear trap'; but it wasn't able to do so - finishing the day below support. I suspect it will make another run at it tomorrow because the market looks like it wants to go higher.

The indices which showed some activity were the Dow which broke support.

And the Semiconductor index which closed below its 200-day MA.

A bounce remains favored in the short term, although the hit in the semiconductor index will have left it close to its stop point. Today's losses were relatively light, but returning those intraday gains will have hurt bulls' confidence.  But tomorrow is another chance for bulls to stamp their mark.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.


Zignals offers a full suite of FREE financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own strategy and sell it in the MarketPlace to earn real cash.

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Daily Market Commentary: Further Selling

All markets experienced another round of selling as Europe dominates the headlines.  The selling wasn't particularly heavy, but it was damaging in taking indices away from support.

The S&P is tempted by the siren call of the 200-day MA as technicals drift lower. However, relative strength continued to strengthen against the Russell 2000; so what money is flowing into the market is flowing into Large Caps.

The Nasdaq is riding declining support lower, which is cold comfort if you are long.  Bullish divergence in MACD histogram offers an inkling a bounce will happen soon.  Like the S&P, looks ready to test its 200-day MA.

The Russell 2000 broke support in a worrying shift after 4 days of holding.  The 200-day MA isn't far away and there is a good chance a 'bear trap' if tomorrow it can break above today's high.

The only index left clinging to a trade-worthy support level is the semiconductor index.  Use a loss of the 200-day MA for stop placement.

For Tuesday, the semiconductor index remains the best opportunity for longs.  Shorts have little to work with until there is some form of bounce - preferably to the 20-day MA.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.


Zignals offers a full suite of FREE financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own strategy and sell it in the MarketPlace to earn real cash.

You can read what others are saying about Zignals on Investimonials.com.
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