Monday, May 03, 2010

Daily Market Commentary: Scrappy Top

Give a little, take a little. The narrow range trading of before has given way to a more volatile range, which for many indices lies bound by 20-day and 50-day MAs. For the S&P, down volume exceeded up volume since the middle of April although technicals have not fully rolled over.

($SPX)

via StockCharts.com

For the Nasdaq the former mid-April breakout gap is providing the support. The volume pattern is not as bearish as it is for the S&P so there is some reason for bulls to be optimistic

($COMPQ)

via StockCharts.com

If there is a catch it's that the semiconductor index has clearly broken both rising trend and the prior gap. Technicals are also significantly weaker which doesn't bode well for either the Nasdaq or Nasdaq 100.

($SOX)

via StockCharts.com

Also switching net negative on the technical front was the Percentage of Nasdaq Stocks above the 50-day MA. This suggest there will be a lower low before a higher high; look for the test of 50-day MA which for the Nasdaq is currently at 2,400 before there is any big run on 2,535.

($NAA50R)

via StockCharts.com

Will Tuesday be a repeat of Last Friday? Today's volume suggests bears will have the edge, but what will they be able to do with it?

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