Tuesday, May 15, 2012

Daily Market Commentary: Selling Continues

It's just hard for buyers at the moment.  Given the 'Santa Rally' lasted into March it has become hard for sidelined money to commit and all too easy for holders of rally gains to sell. Volume climbed in confirmed distribution - a clear win for the sellers.

Large Caps have been the most resilient, although it was interesting to see Small Caps trying to edge the relative strength battle (which if successful would be bullish for the broader market).


The Nasdaq gave up on early promise to close near the lows of the day. Again, the index is hugging the declining support line, but the index is in need of a confidence boost.


Small Caps attempted to regain support and create a 'bear trap'; but it wasn't able to do so - finishing the day below support. I suspect it will make another run at it tomorrow because the market looks like it wants to go higher.


The indices which showed some activity were the Dow which broke support.


And the Semiconductor index which closed below its 200-day MA.


A bounce remains favored in the short term, although the hit in the semiconductor index will have left it close to its stop point. Today's losses were relatively light, but returning those intraday gains will have hurt bulls' confidence.  But tomorrow is another chance for bulls to stamp their mark.

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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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