Wednesday, May 20, 2009

Stock Market Commentary: Backtest Complete?

The reaction move back to the highs may have completed following the late day selling and the higher volume. The Nasdaq high of 1,767 with its bearish inverse hammer was only 6 points away from the early May high of 1,773.

The Dow flashed a similar bearish inverse hammer but did so with marked weakness in on-balance-volume; this was more bearish.

The inverse hammer in the SOX made a picture perfect touch of resistance from former trendline support.

The S&P was one of the first to mark a 'sell' trigger in on-balance-volume and it looks like this weakness is going to take the index down to its 20-day MA at the very least.

Tomorrow could be a bad one....

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.