Monday, March 25, 2013

Daily Market Commentary: Consolidation

Markets are engaged in much back-and-forth which isn't giving either side an advantage. There is expanding technical weakness, which may influence the ultimate direction of the market when the consolidation comes to an end.

The S&P is on the verge of an On-Balance-Volume 'sell' trigger, but is holding above its 20-day MA.


The Nasdaq is running out of time as the wedge narrows.  The MACD trigger 'sell' has been followed with an On-Balance-Volume 'sell'.


Where the Nasdaq is showing more consistent weakness is in its breadth indicators. The Percentage of Nasdaq Stocks above the 50-day MA flashed a return MACD 'sell' trigger.


The Nasdaq Summation Index also experienced a MACD 'sell' trigger.


The Russell 2000 is also shifting sideways as technical weakness accelerates
.

Breadth weakness points to further losses in the parent indices. However, the consolidation is also taking the heat out of these indicators (contributing to the 'sell' triggers), so the next swing low may not be as bad as it might otherwise be.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. You can read what others are saying about Zignals on Investimonials.com.

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