Showing posts from October, 2009

Weekly Stock Market Commentary:

First real damage done to the indices in a quite a while. It's not unusual for sharp counter moves in a well established trend to snap back to former levels - but seasonal factors may prevent this from happening here. Fib retracements are looking a good bet for a downside target with the S&P showing clustered price across its fib range of 835-939. Tech took the harder hit with the Nasdaq 100 down almost 5% with a bull trap A degree of similiarity between now and early 2007 in the Bullish Percents One thing in favour of a snap back rally is the Percentage of Nasdaq Stocks above the 50-day MA - it's close to oversold The Russell 2000 was perfectly pegged by resistance with a new MACD trigger 'sell' to boot - the first index to do so on the weekly chart. So - all-in-all - it was the first week of significance weakness in a while. The next bounce will likely be jumped upon by shorts. Indices 20-day MAs are likely to be attacked aggressively by shorts. The de-Santa rall

Stock Market Commentary: Relief bounce

If volume was higher there would be a stronger case for another reaction low in the markets - but this thought is on hold for now (stochastics for many of the indices aren't quite there for a reaction low). There were at least bullish crosses of the 50-day MAs for the S&P, Nasdaq and Nasdaq 100; but there is a long way to go before the 50-day MAs are challenged for the semiconductors and small caps. Have small caps done enough to negate the breakdown - probably - but real resistance will kick in on the convergence of the 20-day and 50-day MAs. The S&P finished bang on former support, even with a 2.25% gain. Look for some upside follow through Friday, but if there is a gap up it could be hard for bulls to push it higher - especially if 20-day MAs are nearby. Doji for Friday? 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.

Stock Market Commentary: Bull rout - but markets oversold, or close-to.

Bulls were nowhere to be found as small caps and semiconductors took the brunt of the damage. Small caps broke support of the most recent reaction low as technicals turned net bearish. The break of the reaction low sets up a measured move target of 525, but support at 535 with follow through to the 200-day MA make for better downside targets. Semiconductors were little better off; Tuesday saw the loss of the 50-day MA and Wednesday kissed the reaction low good bye. The measured move target of 275 closely approximates the current 200-day MA value - so the 200-day MA is a good downward target to watch for here With semiconductor strength melting away don't expect the Nasdaq to hang on to its reaction low or maintain its bull channel - although stochastics are almost oversold so some form of relief bounce to the 20-day MA could emerge here. The S&P didn't escape with a break from the rising channel on heavier volume with a loss of its 50-day MA. Most indices are approaching ov

Stock Market Commentary: Techs, Semis and Small Caps Struggle.

With traditional bull market leaders breaking down it's not looking good for bulls. Further selling saw breaks of the 20-day MA on heavier volume distribution for the Nasdaq and Nasdaq 100 (the latter to a lesser degree). The loss of the 50-day MA for semiconductors suggest a similar fate is in store for the tech averages Similarly, small caps took a further knock as its 50-day MA was comprehensively sliced. As September/October reaction lows are tested a better picture of double tops - and the potential for measured moves down - will become apparent. But it's looking like a top is in place with just large caps hanging on; the Dow was able to dig in heels at its 20-day MA But for how long? 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.

Stock Market Commentary: Bears build pressure

Continued selling across markets was combined with an increase in technical weakness. Worst hit were small caps; the rising channel broke to the downside and even nicked a break of the 50-day MA. The Nasdaq closed with a MACD and on-balance-volume 'sell' as the 20-day MA comes under pressure. The Dow took it a step further with a registered distribution day in conjunction with a MACD and OBV 'sell'; the losses were enough to redraw the bearish divergence in the MACD. The doji for the semiconductors at the 50-day MA doesn't inspire confidence as the bull trend disappeared [-DI > +DI; ADX < 20] All eyes should be on small caps given their importance in leading markets. Today's break of the bull channel likely means a scrappy sideways pattern to follow. 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.

Weekly Stock Market Commentary: Tiring Rally

Although it has been a couple of weeks since the last weekly commentary there has been very little change in the state of play. For the S&P, overbought stochastics are about to meet a MACD trigger 'sell'. A similar event in early 2007 did not bring an immediate top but selling then marked a reasonable exit given the events which followed. The Nasdaq is still going strong - as is the March 30th 'Buy' signal - but the same pressures at play in the S&P apply here. The Nasdaq 100 pushed above converged resistance with 2008 highs the next port of call: But sentiment remains firmly in the bear camp. The percentage of Nasdaq stocks above the 50-day MA has been on a 'sell' trigger since July 2nd And the Summation Index since July 10th With the Russell 2000 the only index struggling against resistance. The actual top may not be far in terms of price, but the time factor could see another 6-9 months of bullish bias. Hard to be a buyer but existing holders might fi

Stock Market Commentary: Support at 20-day MA and 50-day MAs

Yesterday's sell off suggested a rough Thursday was ahead but bulls were able to defend the 20-day MA in the Nasdaq and 50-day MA in the Russell 2000. For the Nasdaq there was a bullish engulfing pattern/hammer to boot. The Dow had a more clear-cut bullish engulfing pattern, well above its 20-day MA, but in the absence of oversold stochastics can be considered a weak signal. The Russell 2000 rallied back into the lower regions of its 615-625 scrappy congestion. Much work to do but at least the 20-day MA was regained - but it gets much harder for bulls here. The semiconductor index went one step further and found support at its 50-day MA and was able to finish above its 20-day MA, but this index has long since broken from its summer rally. Breadth is also very negative with sharp turns of weakness for the Percentage of Nasdaq Stocks above the 50-day MA and Nasdaq Summation Index; note the extent of the negative divergences between breadth and the parent index. False hope for bulls -

Stock Market Commentary: Late day collapse

Far greater damage done after a wide range day started with new highs - but closed at the day's lows. Volume climbed to register a distribution day which sets up the possibility for a double top. Watch September reaction lows for support as this will form the neckline for any double top. But for all the indices the first test will come from 20-day MAs, with 50-day MAs very close by. The Nasdaq 100 closed with a bearish gravestone doji on technical distribution. This is the first time in a while where there has been three consecutive distribution days for the index The Dow gave up the 10,000 media love-in but has plenty of room to its 20-day MA. But the cracks are getting bigger. The Russell 2000 took a big step down with its MACD trigger 'sell'. Like the semiconductor index, it's in the process of a 20-day MA test. From these charts it would appear small caps and semiconductors are going to lead the market into a long awaited down phase. Dr. Declan Fallon, Senior Market

Stock Market Commentary: Distribution but no real weakness

The losses on heavier volume rank as distribution but on a point scale the losses were mild. However, it wasn't the upside follow through which yesterday's gains had set up. The biggest hit came with small caps and the bearish engulfing pattern brought the index towards its 20-day MA with relative strength shifting back in favour of tech indices; markets are now in their most bearish alignment of large caps > tech > small caps. The semiconductor index had a shooting star (which fell outside of overbought stochastic levels so it's a weak candleline) along with a MACD trigger 'sell'. An underlying weakness influencing tech averages. The weakness in tech averages is apparent in the percentage of Nasdaq stocks above their 50-day MAs. Since peaking in May the percentage has dropped from 85% down to 68% of stocks above this key moving average. How long can this rally last and how hard will it fall when the inevitable decline arrives? How much desire is there from si

Stock Market Commentary: Bull comeback with little volume

It was set up for a good day for the bulls with respectable gains, but volume was lacking. The market is now well set up for some follow through and further gains will mean new 52-week highs for the indices. The Dow is back against channel resistance with a break of the negative divergence in the MACD - this is a bullish set up for Tuesday. Even the semiconductor index was able to dig in at its 20-day MA Will tomorrow see more bull gains? If so - and they are going to stick - then some decent volume better go with them. 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.


Show more