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Selling Continues

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Bears keep the pressure the on with another around of selling. Markets remain range bound, particularly after July's sell off and recovery, which confirmed market trading ranges. The S&P finished at its 50-day MA on lighter volume selling. Beyond the 50-day MA next comes the 20-day MA, but neither MA has played as support in recent months.

'Bull Trap' in Nasdaq

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There was some spill over from yesterday's after hours disappointment in Apple, but after a weak open, bulls were able to mount some challenge by close of business. However, today's close was still below that of yesterday and registered as distribution. Hardest hit was the Semiconductor Index. It experienced a gap down, shedding 2.5%, as it continues to trend lower. Given the extent of the decline it's hard to see how the Nasdaq and Nasdaq 100 can continue to trade near yearly highs.

A Bad Earnings Day, But A Good Day For Profit Taking

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A bad day for earnings, with IBM, United Technologies and Apple all disappointing. With indices at highs (or just shy of resistance) it was going to be a day of easy selling.  With technology particularly hard hit, the Nasdaq did well to cling on to its upside breakout, but given Apple's earnings were after hours it's unlikely to be the same story tomorrow.

Gains Contained

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Monday was a continuation of Friday's action: gains for S&P and Nasdaq, losses for Russell 2000. The issues in play at the start of the day, remain in play at the close. The Russell 2000 is perhaps the most worrying of the indices. Today's losses took the index back to the 50-day MA, but with the index stuck inside a trading range this moving average is unlikely to play as major support. Technicals are also a little iffy: a 'sell' in the ADX is coming up against a potential 'sell' in the MACD, and relatively neutral CCI and Stochastic. The worst of the action is the sharp relative under-performance against the Nasdaq.

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