Tuesday, July 29, 2008

Bears refuse to go on vacation / Bulls on vacation

The day looked bad, but other than a loss of the 20-day MAs for some of the indices it didn't change much. Last week's lows are still a defensive point for the Nasdaq and Nasdaq 100 given they mark the convergence of the breached declining resistance line and horizontal price support.

The Dow is more or less set for a test of July lows given it closed inside the body of the initial reversal day. Stochastics still have room to maneuver down - reaffirming the need for a July low test:

The S&P has similar concerns:

Markets trading in a 'no-mans' land; too late to short, too early to buy. Expect a drift lower in this environment until the approach of support triggers short covering.

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website