Daily Market Commentary: Reversing Yesterday's Gain with a Bigger Loss

It proved to be an ugly day all around. Yesterday's recovery rallies were quickly taken out with today's heavy losses. Attempts to find support at 50-day MAs and/or channel support were pushed aside. However, these losses have some way to run before August swing lows are challenged.

The S&P could look to mount a new rally, although I suspect it will struggle to get close to 1,987.  If it can't move above its 50-day MA, or finds resistance near this moving average, then shorts will have an entry opportunity for a push down to August swing lows and/or 200-day MA.

The Nasdaq broke below its trading range on higher volume distribution. However, unlike the S&P, it's close enough to support (currently resistance) to be able to mount a challenge.  Bulls may find an opportunity in this index tomorrow.


The Nasdaq 100 exited its 6-month channel. Such action typically leads to the development of a trading range, but it does mark a slowing of the prior advance.


The Russell 2000 took a big hit too. However, it's caught in a no-mans land between the bounds of the former declining channel and May swing low support.  It's hard to get a trade advantage, although the proximity to the July swing low gives an edge to bulls


For Friday, look for recovery opportunities in the Nasdaq and Russell 2000, but watch for a shorting potential in the S&P if buyers take the index close to 1,987, or an expansion of the channel breakdown in the Nasdaq 100.

---

Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.

All Contributions Welcome - Thank You!
Follow Me on Twitter

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

JOIN ZIGNALS TODAY - IT'S FREE!

Popular posts from this blog

Nasdaq primed for breakout

S&P "Bull Trap"?

"Black Candlesticks" are a concern for the S&P and Nasdaq

Archive

Show more