Sellers Return

It has been a while since sellers finished the day with the upper hand.  But since the retest of August lows sellers have found it difficult to build a foothold for which shorts can attack. Today's action is a start, but it's not a victory for shorts.

The Nasdaq 100 has been knocking on the door of the 200-day MA for a few days, but today was the day it finished with a bearish gravestone doji at this moving average. The 'Breakout' is still valid, and technicals are still net bullish, but a 'bull trap' would increase pressure on longs.


The Russell 2000 experienced the largest sell off on the day. The faster moving 50-day MA is playing as resistance for this index.  However, the rally didn't make it as far as channel resistance and this may just be a pullback in a move to this resistance point.


The S&P is caught in a no-mans land, reversing between support of the 50-day MA and resistance of declining resistance.  However, the index has so far honored the jobs-data spike high as a resistance point. If sellers maintain control tomorrow, then look to the 50-day MA for support.


Premarket and the first 30-minutes of action will be key. Shorts (myself included) have struggled as each attempt at defining resistance have been followed by a shorts-stop chase and new highs. A second day of selling may force longs to start joining the sell-side and take profits - an action which hasn't be forced on them in recent weeks.

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

Share on StockTwits

---

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.

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. 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.

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