Wednesday, November 16, 2011

Daily Market Commentary: Selling Pressure

Sellers made their first show in over a week as volume climbed. Worst effected were Large Caps, but no index escaped their influence.

The S&P cracked below its 20-day MA as 1,260 played as resistance (and the marker line for the two 'bull traps'. The MACD has been on a 'sell' signal since early November, but other technicals are still okay.


The Nasdaq is contained by the 200-day MA. Yesterday's gain to this moving average was rebuffed and ended today with a loss of the 20-day MA. However, 2,616 support was retained. Like for the S&P there was an earlier loss in the MACD which was followed by a bear cross between +DI and -DI. The ADX is non-directional - reflecting the sideways trading the index has experienced since early October.


The Russell 2000 held up a little better today despite exhibiting greater technical weakness. The index is below its 20-day MA (just) but is only a couple of points away from 731 support.  However, if weakness is not to extend from Large Caps to Small Caps then buyers will have to get to work from tomorrow's open.


The Nasdaq 100 is similarly delicately poised. There is significant support at 2,320 which is still been honored, although on-balance-volume has switched to a 'sell' trigger to add to the 'sell' triggers in the MACD and +DI/-DI.


Tomorrow, bears will have an opportunity to turn the screws and pull indices out of the sideways pattern traded since early October. In the bulls defense is the presence of support at 50-day and in some cases,  200-day MAs.

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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 Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.


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