Thursday, August 06, 2009

Stock Market Commentary: Second Distribution Day

Trouble travels in pairs. Today saw the first real selling in the S&P and the second distribution day in a row for the Nasdaq. This sets a preliminary course for the 20-day MAs; earlier tests of indices 20-day MAs frequently saw modest overshoots before bull trends resumed. For example, in the Nasdaq the 20-day MA trades at 1,926 with the potential to reach down to the 50-day MA currently at 1,858.


For the Nasdaq 100 the rising channel is playing as resistance with the lower channel band running parallel to the 50-day MA probably the best opportunity for support.


One other change was the MACD trigger 'sell' in the semiconductor index which could see the Nasdaq and Nasdaq 100 quickly follow suit. I would expect its 20-day MA to be tested Friday.



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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