Tuesday, June 22, 2010

Daily Market Commentary: Breakout Failures

Yesterday's weak end-of-day followed through to the downside, knocking out breakout support for many of the indices and 200-day MAs too (Large Caps). If there was some compensation it was the low volume associated with the selling.

The selling wasn't enough to prevent a 'sell' trigger for on-balance-volume with the directional index close to a bearish cross.

($SPX)

via StockCharts.com

The Nasdaq hasn't quite broken its 200-day MA and is in fact very close to a bull cross of the 200-day MA by the 20-day MA; 2,249 is the watch area.

($COMPQ)

via StockCharts.com

The Russell 2000 had one of the biggest losses on the day, but it is still well above its 200-day MA at 636.7

($RUT)

via StockCharts.com

Finally, the semiconductor index went from net bullish (technically) to an early 'sell' trigger. There is plenty of wiggle room for bulls to work with, first of which is the 20-day MA.

($SOX)

via StockCharts.com

For Wednesday look for bulls to rally back, likely close to - or just below - 20-day MAs. Support connecting February-June lows is hugely significant and must be defended; break these lows and it could get ugly quick.

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