Thursday, February 19, 2009

Stock Market Commentary: Negative tone remains

There was no sparks and fireworks, just a general acceptance of Tuesday's losses. The worry is from supporting technicals of indices. None are oversold enough to suggest a short term bottom is in place and many traders seem primed for further losses, or at least, unwilling to buy. The Nasdaq 100 shows the technical vulnerability best; note the dogged action of MAs as resistance.

The way markets are positioned it looks like they are set for a big move down. The Dow is looking the most vulnerable, but at least it's technically oversold:

Nasdaq Summation Index has only now given a 'sell' from prior overbought levels. Very ugly.

Futures are suggesting a positive tone (5:20am ET) but it will need to be strong early to offset bearish pressure.

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