Monday, October 12, 2009

Stock Market Commentary: Indecisive Doji

Breaking to new highs was a step too far for some of the indices after prior five days worth of gains. But the days' indecision was not accompanied by heavier volume churn so it would appear to play more towards a consolidation than a reversal point. However, a gap down tomorrow would give bears something to work with.

The Nasdaq looks ready to repeat a mid-August like retracement; the October reaction low - and/or 50-day MA - will be critical for bulls to defend if Tuesday opens on weakness (in order to maintain the sequence of higher highs and higher lows). MACD trigger line inching towards a 'buy' trigger.


The Dow was an exception in it was able to make a new higher high with a MACD trigger 'buy' and bullish cross for on-balance-volume:


The semiconductor index crept over former channel support but closed on the line. It looks the most vulnerable to an Evening Star candle line.


Tomorrow will likely see some follow through downside but it will be the volume that accompanies it which will be of greater interest (up or down).


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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