Stock Market Commentary: Creeking

The last few days of tight trading were a pressure cooker waiting to release. The eventual outcome was a gap down on heavier volume, but the extent of the selling relative to the point loss was not too damaging but there are points of concern.

For the Nasdaq there was a MACD trigger and On-Balance-Volume 'sell' trigger matched with confirmed distribution. However, the 20-day MA was able to act as support and 1,785 breakout support wasn't challenged at all.

But the Russell 2000 lost its breakout with a MACD trigger 'sell' and MACD bearish divergence. It too found support at the 20-day MA. However, as a leading index could be a foreshadow as to what is to come for the Tech averages.

The S&P lost its breakout with its 20-day MA and rising support from March under threat. As a lagging index it's no surprise to see it struggle but a down day tomorrow will leave plenty of room to the downside with the rising 50-day MA more likely to be support than the falling 200-day MA.

The semiconductor index is also looking shaky with a MACD trigger 'sell' (+ bearish divergence) right on support - not good news.

Another down day tomorrow and it will probably be a good time to take a lengthy vacation.

Enter to win the Trader's Business Plan prize

[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 ( 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, the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

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