Friday, August 19, 2011

Daily Market Commentary: Indecision No More!

After a series of light trades on minimal volume the market woke to quite the scare. My suggestion for a tepid decline was done and dusted by 9:30 am as cash markets stepped off the cliff. Bulls will be looking for a rally much like action following previous large day sell offs, but will buyers be willing to step in front of the bus?

For the S&P sharp losses were accompanied with volume almost double the previous day. A 4%+ loss leaves it just 39 points away from the August low retest.

($SPX) via StockCharts.com

The Nasdaq gapped-and-ran lower, losing over 5%. It's only another 2% loss from the August swing low. 

($COMPQ): via StockCharts.com

While the Russell 2000 gave up close to 6% but still has room to maneuver to August lows.
($RUT) via StockCharts.com

But one of the key victims is the semiconductor index. Any chance of a bear trap looks dusted. This will only add to the selling pressure in the Nasdaq and Nasdaq 100.

($SOX) via StockCharts.com

Tech indices are the nearest to August lows and likely to lead lower tomorrow. Watch Futures for leads.

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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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