Monday, June 22, 2009

Stock Market Commentary: Bears Make A Run

On first appearance it was a nasty knock to the indices but the volume was not excessive for the degree of point loss. The Nasdaq has three out of four supporting technicals on 'bear' signals but as long as the 50-day MA holds it's not over for the bulls.


But the worry for the Nasdaq (and Nasdaq 100) is the collapsed state of the Semiconductors; its 50-day MA was cleanly sliced and all supporting technicals are in the red. Bulls will really need to step up on Tuesday if a rout is not to emerge here. Two-hundred day MA is next support.


The Russell 2000 was a mixed bag with the clear break of rising support from late March reaction lows on the back of a bullish "Golden Cross" between the 50-day and 200-day MAs.


The S&P was another mixed bag with the 200-day and 50-day MAs creating a "Golden Cross" but the index cut through each MA! Relative strength also swung away from speculative small caps in favor of 'safe haven' large caps. Double trouble.


On the bright side, all indices are approaching May lows which may set up the boundaries for a summer trading channel. Again, volume was light so this was selling without conviction. Not an ideal trade scenario on either side.

Enter to win the Trader's Business Plan prize of a free psych test and free access to the trading plan development program. Retail value $398

[1] Register at Zignals.
[2] Go to Charts and select a stock (you will be prompted to download Microsoft Silverlight)
[3] Click on the YourCall Icon


[4] Enter a Call by giving a stop and target price; make sure the Time Period is set to Short (month)
[5] Enter as many calls as you like up until the end of June; these can be long or short signals
[6] Send me your Zignals Userid so I can track the calls made (declan-at-zignals.com) or post it in the comments section of this post. In your email make reference to the competition.
[7] The Zignals member with the stock giving the highest return from either a target hit or expiration after 22 trading days will win the prize. Only stocks or FX prices listed on Zignals qualify for entry (no pink sheet stocks). The announcement of the prize winner will be made at the end of July.

Good luck!


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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