Monday, April 08, 2013

Daily Market Commentary: Low Volume Recovery

While it was a decent enough day on a point-win scale, it wasn't particularly robust on a volume basis. Markets have suffered two days of distribution in the last four, with a marked relative shift towards defensive Large Cap Stocks. Given this, any bounce which emerges may see Small Caps underperforming.


The Russell 2000 did bounce, defending its 50-day MA in the process.  However, given the shift to Large Caps it may see itself under attack at the 20-day MA.


The Nasdaq has struggled since the start of January to take on a leadership role. At least it was able to hold above its 50-day MA after Friday's recovery.


Nasdaq sentiment continued its bearish path.  The Nasdaq Bullish Percents is net bearish, joining the Percentage of Nasdaq Stocks above the 50-day MA and Summation Index with net bearish technicals


Look for weaker prices in the days and weeks ahead. The S&P should be the most resilient to the selling.

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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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