Wednesday, May 27, 2009

Stock Market Commentary: Weak Close

Another shooting star (there you go again Dave!), another distribution day for the Nasdaq and Nasdaq 100. Consolation came from each holding their respective 200-day MAs.

Their general good health was down to the semiconductors. They spent the day swimming against the tide of broader market selling. Although it tired at 270 resistance.

There was no such solace for large caps, although volume selling was not as heavy as it was for tech. The S&P clings to rising support from April lows.

Given the sharp drop in bullish sentiment and the number of distribution days in May it is looking more and more like an intermediate term top is in place and markets will remain weak for the summer and likely into the seasonally weak September, October period. However, this does not necessarily mean a sharp fall is imminent; a messy but shallow decline would match a listless summer trading period.

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.