Tuesday, June 16, 2009

Stock Market Commentary: Breakdown

Yesterday was the warning, today was the confirmation. A string of support breaks have given bears the upper hand. The only indices to hold out were the Nasdaq and Nasdaq 100. The DOW and S&P each lost rising support dating back to March. Relative strength again shifted with another notch towards the bears with Tech leading Large Caps leading Small Caps.

The Semiconductor Index lost rising support of 270. Look for this weakness to take down the Nasdaq and Nasdaq 100.

The Russell 2000 finished somewhat in between; it held March-June support but cracked below its 20-day MA.

I suspect we are looking at a the early stages of a sideways range; a straight drop seems too expected although a test of lower Bollinger Bands would appear likely.

Enter to win the Trader's Business Plan prize of a free psych test and free access to the trading plan development program. Retail value $398

[1] Register at Zignals.
[2] Go to Charts and select a stock (you will be prompted to download Microsoft Silverlight)
[3] Click on the YourCall Icon

[4] Enter a Call by giving a stop and target price; make sure the Time Period is set to Short (month)
[5] Enter as many calls as you like up until the end of June; these can be long or short signals
[6] Send me your Zignals Userid so I can track the calls made (declan-at-zignals.com) or post it in the comments section of this post. In your email make reference to the competition.
[7] The Zignals member with the stock giving the highest return from either a target hit or expiration after 22 trading days will win the prize. Only stocks or FX prices listed on Zignals qualify for entry (no pink sheet stocks). The announcement of the prize winner will be made at the end of July.

Good luck!

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