The Nasdaq had its 'Golden Cross', but it didn't see a test of this moving average cross. Given the weak finish, the test could occur tomorrow.
The S&P is looking increasingly like it's going to undercut 2,019. After today's action had it above both 50-day and 200-day MAs, to finish below both moving averages is a concern. Buying volume was also well down on yesterday's selling.
The Percentage of Nasdaq Stocks above the 50-day MA peaked at 63% before dipping below 50%. Today saw a net bearish turn for supporting technicals, setting up for a move to sub-20% and potential lower prices for the Nasdaq.
The struggling Russell 2000 was another index threatening to break November swing low support. It's brief moment in the sun as a relative market leader looks over, and the current outlook suggests a a retest of the 1,079 swing low had a high probability of coming true.
Bulls may continue to look at the Semiconductor Index. Today's action was similar to other indices, but it was able to defend converged 50-day and 200-day MAs. However, technicals are rolling in favour of bears.
Tomorrow, bears should monitor both S&P and Russell 2000 for a loss of November swing lows. Bulls should watch the Semiconductor Index for a bounce off the 200-day MA.
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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