Thursday, March 26, 2015

Nasdaq finishes on 50-day MA

There was some carryover from yesterday's heavy day of selling. My tracking of ETF alerts for Zignals didn't mark a trend reversal for ultrashort ETFs, only ultralongs; suggesting yesterday's selling was primarily driven by profit taking and not shorting activity. Today's action brought indices closer to support, which slowed the rate of loss.

The S&P closed with a neutral 'spinning top' on lighter volume. The 50-day MA didn't offer much support, but the low at 2,039 remains valid.


The Nasdaq dug in at the 50-day MA, reclaiming the swing low in the process. Tomorrow is set up for a rally to challenge the 20-day MA; an area where shorts may look to get aggressive. Today also closed with a 'sell' trigger in On-Balance-Volume.


The other index to watch is the Semiconductor Index. Today's session recovery occurred just above converged 660 and 200-day MA support. While it's one of the hardest hit indices, it perhaps offers the best chance for a relief bounce gain,


Just for completions sake, the Russell 2000 finished well above its swing low, but between 20-day and 50-day MAs. A move back to the 50-day MA converging with 1220 support could offer longs an opportunity; stops on a loss of 1206.


After yesterday's rough and tumble there was always going to be a risk of some carryover into today. With swing low support nearby tomorrow may see a tentative return of bulls, although once bitten twice shy buyers may struggle to make it back to highs. Large Caps remain more vulnerable to selling and shorts than either Small Caps or Tech indices.

You've now read my opinion, next read Douglas' and Jani's.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com, and Product Development Manager for ActivateClients.com. I do a weekly broadcast on Friday's at 13:30 GMT for Tradercast, covering indices, FX and gold, silver and oil - all are welcome! You can read what others are saying about Zignals on Investimonials.com.

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