Thursday, June 16, 2011

Daily Market Commentary: Techs Struggle

Markets diverged with Tech indices falling while Large and Small Caps dug in at support.

The S&P tested its 200-day MA at the low of the day with a neutral 'spinning top'. Volume was lighter, so there wasn't the same level of conviction on the part of buyers at the 200-day MA as there was with selling activity yesterday.


The Dow still has a long way to go to get to its 200-day MA. If the selling continues in other indices bulls will only be left with the Dow at its 200-day MA!


The Russell 2000 continued to play with converged support of January lows, 200-day MA and the lower channel line. Of the current indices it probably offers the best risk:reward because of the multiple support levels available.


However, the semiconductor index is heading further away from its 200-day MA and is a long way from the March swing low. It's on a path towards the lower channel line and has a long way to go. Selling in semiconductors is pressuring the Nasdaq and Nasdaq 100


The Nasdaq 100 having drifted below its 200-day MA and is about to dip below the March swing low.


While the Nasdaq still has the March swing low to work with despite the loss of the 200-day MA.


For tomorrow, best play for buyers is the Russell 2000 with its three tier support. Shorts will wait for a bounce in the semiconductor index, probably using the 20-day MA to build a position.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Zignals Trading Strategy Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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