Wednesday, February 22, 2012

Daily Market Commentary: Further Losses in Small Caps

Indices suffering most from recent selling took the hardest hit today.  The Russell 2000 finished just above the 20-day MA as the index pushed sideways.


The Nasdaq took the next largest hit on the day and was left with an upcoming 'sell' trigger in on-balance-volume. Channel support is key; can the rally continue and defend this support?


The Nasdaq 100 was likewise hit. Today saw a MACD trigger 'sell' - the first technical indicator to take a turn for this index. However, relative strength continues to improve.  This favors a bullish defense of channel support.


Although the semiconductor index confirmed the break of the rising trend, it held on to the 20-day MA. Relative strength has shifted away from this key economic bell weather to other Tech stocks, although this relationship is still in whipsaw territory and has yet to establish a new trend.


Tomorrow is a question for channel-support buying in the Nasdaq and Nasdaq 100. If it's to occur it will have to start in the morning; a gap down will be enough to generate a channel break.

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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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