Monday, November 05, 2012

Daily Market Commentary: Nasdaq Holds 200-day MA - Still

Before I take a look at the Indices, I had to mention the dying gasp that was my $XLU position.  Utilities have had a rough few days, and the break of the swing low effectively knocked me out of the position I had.  Tax considerations for dividend paying stocks are hurting the sector.  And unfortunately, my sectorbreadth analysis suggests there is more downside to come.


The indices were far more low key than the Utility sector. The S&P finished with a modest recovery, but has to contend with a 'Death Cross' between 20-day and 50-day MAs. Volume was light.


Meanwhile, the Nasdaq continued to dig its heels it at its 200-day MA. Buyers have not given up on this index yet.


The Russell 2000 has yet to manage a third pass on its 200-day MA, but it came close today.


Disappointing though it was for my XLU position, there is still enough on offer from the Nasdaq and Russell 2000 for longside plays. The worry in weakening breadth is that an oversold status has not yet been reached. In the absence of this, a strong swing low can't develop, which is why 200-day MAs for the Nasdaq and Russell 200 will be key if a rally is to develop.

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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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