Monday, November 09, 2015

Sellers Apply The Squeeze

A surprising turn by bears (still 30 minutes until close) has undone all of Friday's bullish gains and quickly dropped indices back towards support levels. Unfortunately, my Nasdaq 100 short was knocked out at its stop pre-market. Had bulls not put the work they did to recover initial losses on jobs data I might still be in this. C'est la vie.

The S&P fell back to converged support of the 20-day and 200-day MAs. There is some claw back from the lows, so this support could hold through tomorrow.


My Nasdaq 100 may have flagged a 'bull trap', but it hasn't fallen far enough from support to suggest bears will have it all their own way. The October bull gap is substantial, and it hasn't been challenged yet. A move back to the 20-day MA would also mark a test of this gap and is perhaps favored at this point.


The star performing Russell 2000 felt the most pain, but is caught in a no-mans land between 20-day and 200-day MAs.


The Dow Jones, like the S&P, is near converged 20-day and 200-day MAs.


The Nasdaq remains in a half-way house between support and resistance.


For tomorrow, bulls won't want to see premarket weakness, but may be inclined to step in if shorts can't press their advantage.

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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