Stock Market Commentary: Down But Not Out

After a very weak opening period bulls were able to rally the troops back into the close. The call-to-arms was triggered by the respective 20-day MAs of the indices but whether they can act as support again if tomorrow opens weak will be open to question. The Nasdaq registered a technical distribution day as on-balance-volume managed a bearish cross of its trigger line (adding to the earlier MACD trigger 'sell')

There was a bearish shift in relative strength as tech stocks gained an edge over small caps {Tech > Small Caps > Large Caps} - a more bearish alignment for markets.

The S&P made its own support test, not just of the 20-day MA, but of the rising black channel too.

Tomorrow will be interesting - a gap down and a move to break the 20-day MAs would look favoured. But even a higher open will see resistance at Tuesday's highs which again looks to give bears the edge for Thursday.

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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