Friday, May 22, 2009

Stock Market Commentary: Don't Expect Much For Friday

The swathe of bearish candlesticks on Wednesday gave way to the inevitable selling. However, now that it is done (to an extent) it is unlikely Friday is going to see much follow through downside. The Nasdaq finished on a new softer trendline and will likely remain there by the time the market closes. The 200-day MA will probably contain any attempt at a rally.


The Dow is similary inclined although supporting technicals point to greater weakness in the days ahead.


The recent rally in breadth failed to find support from technicals; this rally is nothing buy a relief rally in a broader intermediate downtrend. The Percentage of Nasdaq Stocks Above the 50-day MA shows this best.


With able assistance from the less volatile Summation Index:


Best to sit this out and see where the next reaction low lies; 1,773 is already the line in the sand as a reaction high for the Nasdaq (ditto the May highs for the other indices).

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

 
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