Daily Market Commentary: Stall in Decline
What stood yesterday, held today. One of the exceptions was the Nasdaq 100 which undercut the 50-day MA, but the prior swing low from early July held. Technicals continued to decline.
On the other hand, the Dow was able to mount a small rally, gaining 58 points from working off its 50-day MA. It also saw an uptick in relative strength to the Nasdaq 100, reflecting a flight to safety. Volume was considerably lighter, which in itself is a warning sign suggesting the 50-day MA is not major support.
The Semiconductor Index was another index to benefit which rallied, but got stuck at its 50-day MA. Another gain in the next few days to take it past the 50-day MA will set up the 200-day MA as a target.
The rally in the semiconductor index may provide the impetus for a move higher in the Nasdaq. Today's loss confirmed a channel break, but a rally Thursday sets up the potential for a 'bear trap'.
Tomorrow is set up for a gain. Any gain which re-establishes support of prior rising channels will potentially generate powerful 'bear traps' and good opportunity for further gains.
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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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On the other hand, the Dow was able to mount a small rally, gaining 58 points from working off its 50-day MA. It also saw an uptick in relative strength to the Nasdaq 100, reflecting a flight to safety. Volume was considerably lighter, which in itself is a warning sign suggesting the 50-day MA is not major support.
The Semiconductor Index was another index to benefit which rallied, but got stuck at its 50-day MA. Another gain in the next few days to take it past the 50-day MA will set up the 200-day MA as a target.
The rally in the semiconductor index may provide the impetus for a move higher in the Nasdaq. Today's loss confirmed a channel break, but a rally Thursday sets up the potential for a 'bear trap'.
Tomorrow is set up for a gain. Any gain which re-establishes support of prior rising channels will potentially generate powerful 'bear traps' and good opportunity for further gains.
----
Follow Me on Twitter
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.
Zignals offers a full suite of FREE financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own strategy and sell it in the MarketPlace to earn real cash.
You can read what others are saying about Zignals on Investimonials.com.
JOIN ZIGNALS TODAY - IT'S FREE!
