Monday, March 05, 2012

Daily Market Commentary: Nasdaq Breakdown

A mixed bag of action.  Large Caps were able to recover intraday losses and hold channel support, but Tech indices suffered gap breakdowns with channel breaks, 

Leading the push down was the semiconductor index. The index lost rising support in February and is only a few points shy of a test of the 50-day MA.


The hit in the semiconductor index contributed to the channel break in the Nasdaq. Although the Nasdaq was able to defend its 20-day MA.


The Nasdaq 100 similarly dropped out of its rising channel and is on course to test its 20-day MA.


Small Caps recovered the intraday loss as it approaches its 50-day MA.  But this followed from a loss of its rising channel as relative strength continued to deteriorate.


Meanwhile, the S&P was on course to also break from its channel, but by the close of business it had recovered its intraday loss.


For Tuesday, look for tests of 50-day MAs for the Russell 2000 and semiconductor index. The latter will coincide with test of 20-day MAs for Nasdaq and Nasdaq 100.  Tuesday will be an important short term test for buyers; losses of these areas will contribute to more protracted declines.  Large Caps are likely to follow suit, although they are holding up well.

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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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