Daily Market Commentary: Fails Follow Through

Thursday opened with the market unwinding higher, but it wasn't long before the gains were clawed back - and then some. It was commendable bulls didn't run and hide, although it's going to be harder for them to push higher given the morning's events. With bears spoiling, now could be the time we start seeing tests of 20-day MAs.

The S&P is holding above the rising channel line (former resistance). But there was an on-balance-volume 'sell' as technicals started to weaken.

($SPX)

via StockCharts.com

The Nasdaq closed with a bearish engulfing pattern, which is not hard to understand given yesterday's narrow range day. Strengthening the bearish factor is overbought stochastics. Look for a lower close Friday.

($COMPQ)

via StockCharts.com

The Russell 2000 closed just above trading range support. It's not as bearish as other indices but will likely suffer if others do.

($RUT)

via StockCharts.com

The Dow completed a picture perfect touch of rising channel resistance. Lower prices are the natural route from here.

($INDU)

via StockCharts.com

Friday is likely to be a tough day. Bulls will be looking for damage limitation and perhaps a test of 20-day MAs; a strong finish would set things up nicely for Monday. If bears can attack the morning session with gusto it's going to be hard for bulls to recover, particularly if indices fall back into prior trading ranges.

Follow Me on Twitter

Build a Trading Strategy Business in Zignals



Dr. Declan Fallon, Senior Market Technician for Zignals.com, offers a range of stock trading strategies for global markets, also available through the latest rich internet application for finance, the Zignals MarketPortal or the Zignals Trading Strategy MarketPlace.

Zignals offers a full suite of financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own trading system and sell your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com.
JOIN US TODAY - IT'S FREE!

Popular posts from this blog

Nasdaq primed for breakout

S&P "Bull Trap"?

"Black Candlesticks" are a concern for the S&P and Nasdaq

Archive

Show more