Monday, September 28, 2009

Stock Market Commentary: Weak Buying

Was today a bull trap? Big percentage gains on what looked to be 'buy-the-dip' action, but light volume told a different story. This rally will need new closing highs to prove its merits but Friday's reaction lows are a good place for a profit-take stop.

The Nasdaq had a MACD trigger 'sell' from Friday (+ bearish divergence)


As did the Dow


And Small Caps. But the Russell 2000 left its own mixed message with a favourable shift in relative strength (bullish); Small Caps > Tech > Large Caps.


Market Sentiment showed its own vulnerability with the Percentage of Nasdaq Stocks above 50-day MA turning net negative on supporting technicals (with a bearish cross of the 5-day EMA) as its recent breakout clung on for life.


Today looked to be a day of false buying.


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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