Thursday, May 07, 2009

Stock Market Commentary: One Day Loss has Support

The inevitable happened and sellers took control on heavy volume. It's not all bad given the proximity of the first level of support, namely the indices 20-day MAs. For the Nasdaq this means 1682 but the bigger concern is the sharp drop in relative performance against the S&P; it certainly looks like Tech has had its day at least for now.


The semiconductor index took the hit hardest but it did fall back to rising support and didn't lose its 200-day MA. However, there was a 'sell' in the CCI and a bearish divergence in the MACD trigger line.


The S&P showed what a mediocre day it was for Large Caps. Whatever strength emerges over the next few days will likely be channeled to large caps over Tech stocks, but in the larger scheme of things everything will head down in the short term as overbought market conditions are relieved.


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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