Monday, April 09, 2012

Daily Market Commentary: S&P Breakdown

The S&P finally cracked below rising trendline support, but did so on light volume and remained above its 50-day MA. Technical weakness expanded, but the index is not net bearish - yet.


The Nasdaq gave up 20-day MA support, but still has room to run to its 50-day MA.


The relationship between the Nasdaq Bullish Percents and the Percentage of Nasdaq Stocks above the 50-day MA is reaching a swing high.   The last such peak in November 2011 marked the swing low for the Nasdaq; will it again prove so this time?


Small Caps are in the most trouble; the index turned net bearish as the 50-day MA was undercut.


While the Dow was left with the makings of a 'bull trap'


So while the indices look to be only beginning their period of weakness there is enough to suggest a swing low is in place in the Nasdaq, although my sectorbreadth studies suggest further downside is required to confirm a bottom is in place.

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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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