Daily Market Commentary: Stall Day 2

It was a roller coaster of a day but in the end markets finished slightly lower. Early action saw challenges on resistance as marked by Monday's highs, but markets were unable to push their advantage.

The S&P finished with a 'spinning top' on heavier volume; volume was enough to generate a sell trigger in on-balance-volume. There is an upcoming 'golden cross' between 20-d and 50-d MAs which means the 20-day is going to be the support area on the pullback.

($SPX)

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The Nasdaq touched bases of the 200-day and 50-day MAs. With the declining trendline (former channel resistance) to work with there is a chance we will see buyers make a stronger stand at the convergence of trendline, 20-day and 50-day MAs.

($COMPQ)

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The Russell 2000 played to form and tested the converged 20-day and 200-day MAs. If the market closes lower tomorrow it would suggest converged MAs will not hold.

($RUT)

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The Dow violated former trading range resistance to take it down to its 200-day MA, but in the end closed the day just a hair above - keeping the breakout intact.

($INDU)

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Semiconductors played off all three moving averages; 20-day, 50-day, and 200-day MAs - finding support at the latter. The sideways trading range is still dominant but if buyers are going to play ball they will need to step up to the plate soon.

($SOX)

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Tomorrow's interest will focus on Semicondutors, Russell 2000 and the Dow - buyers don't have much room to maneuver if they are to defend key moving averages in these indices. A weak close tomorrow - even one which held these moving averages - would be an omen for worse to come.

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Daily Market Commentary: Markets Ease Back

The S&P pulled away from its 200-day MA on light volume. No great surprise given yesterday's higher volume indecision. Both 50-day and 20-day MAs are a couple of percent away which suggests 2-3 down days to come.

($SPX)

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The Nasdaq eased back onto its 200-day MA which may attract some buyers although it's a little early for other indices.

($COMPQ)

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Small Caps took a larger step back at the same time of a 'Death Cross' between 50-day and 200-day MAs. Another day like today would see these moving averages tested.

($RUT)

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But the Dow bucked todays' other market activity with some continued tight trading. Trading range support held which is bullish as is the proximity of the 200-day MA.

($INDU)

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All-in-all, today's action will not have come as a surprise. Tomorrow could see more of the same before moving averages start kicking in as support.

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Daily Market Commentary: Stalling Action

The past few days have been very good to bulls and today's action was a pause in the advance. Some indices fared better than others and tomorrow will likely see a little more downside, but as long as the past few days gains' hold (perhaps with the help of lead moving averages) it will be a good buying opportunity for bulls.

The S&P finished with a narrow doji on the 200-day MA. Volume climbed to register a churn day, but not necessarily bearish.

($SPX)

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The Nasdaq was a little more bearish with a bearish 'cloud cover' candlestick, but volume was not in line with distribution.

($COMPQ)

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Small Caps also closed with a bearish cloud cover at two levels of resistance.

($RUT)

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We have a tentative higher low for the indices; if the mid-July reaction low for all indices can hold there is a good chance the early-July 'bear trap' is going to mark a bottom perhaps lasting the rest of the year. It won't take much for bulls to create a new higher high so the ball is very much in their court. But for the next couple of days look for lower prices.

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Zignals offers a full suite of 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 trading system and sell your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com.
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