Wednesday, September 25, 2013

Daily Market Commentary: Day Four of Losses

For yet another day there was little change in the overall market picture. The Dow did get down to (and below) its 50-day MA, and is fast heading to the 20-day MA. Trading volume was light, suggesting sellers are tiring.


The Russell 2000 is holding above 1,059 support, although the index was rebuffed twice on a push to 1,080. But as long as 1,059 support holds it's very much in the bulls camp.


The semiconductor index is holding on to rising support which is also good news for bulls. The narrow action suggests a sharp reaction soon - and this response *should* be higher given the overall bullish state of the market - but a counter move is likely to be just as sharp (option spread trade?).


The Nasdaq 100 is holding on to its bull flag and is in very good shape for a push higher.


While the market has been down over the past four days, it's still acts like a bullish market. Moving averages (20-day and/or 50-day MAs) are a marker for measuring long side risk, although buyers were happy to ignore the 50-day MA in the Dow. The Russell 2000 and Nasdaq 100 are the most bullish of the indices, so any sniff of buying in the indices should focus on these two as the markets most likely to gain.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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