Wednesday, June 30, 2010

Daily Market Commentary: Weakness Continues

Yesterday's huge losses had the potential for a counter rally but after a weak attempt to regain support, sellers returned in the last hour of trading. With losses over 1% there is no doubt support has broken.

The S&P is very close to a "Death Cross" between 50-day and 200-day MAs although today's selling volume was light.

($SPX)

via StockCharts.com

Will the former resistance line help as support for the Nasdaq? Buy the open and use a 1% stop - sell on test of 20-day MA.

($COMPQ)

via StockCharts.com

The Dow is offering a similar buying opportunity to the Nasdaq.

($INDU)

via StockCharts.com

The Russell 2000 failed to cling on to support and followed the other indices lower. But if other indices rally tomorrow will it create a 'Bear Trap'?

($RUT)

via StockCharts.com

It's hard to say whether the buying opportunities available in the Nasdaq and Dow will prove fruitful given a similar test in the S&P failed. A series of sharp down days has left markets oversold on the short term and primed for a rally to 20-day MAs (as a start). Whether anything more substantial could come out of a rally is another matter. Check out Richard Lehman's charts to see the bearish bigger picture.

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