Wednesday, November 04, 2009

Stock Market Commentary: Disappointment for Bulls

The bright start made by bulls was quickly erased by the close as a combo sell-the-news 'Fed Factor' and House vote on credit card rates kicked in. While not outright bearish it does set up an aggressive play for shorts to push into Tuesday's gains.

For the Nasdaq, prices are left clinging to channel support. Today's distribution makes holding support tomorrow more difficult with overhead supply at the 50-day MA available. Will this evolve into a head-and-shoulder (bearish) reversal pattern? If so, the right-hand-shoulder will emerge c2,165.

The Dow is a good example of today's damage given it was repelled at the 20-day MA after major gains; shorts active here.

The Russell 2000 finished with a bearish cloud cover candleline, although with stochastics oversold it's not a strong pattern. The 200-day MA is looking a needed test here.

The semiconductors closed with an isolated gravestone doji - watch for a gap down tomorrow:

For all intents, it's looking like Thursday is going to be a day for shorts/bears. Bulls will have to dig in deep if they are to consume the lingering supply at 50-day and 20-day MAs.

Dr. Declan Fallon, Senior Market Technician, November 2009 has seen a significant upgrade and is on course to becoming the eBay of finance with our new Beta MarketPlace and a new rich internet application for finance, the Zignals Dashboard. Zignals now has new fundamental stock alerts, stock charts for Indian, Australian, Frankfurt and soon Canadian stocks, tabbed stock list watchlists, multi-currency portfolio manager, active fundamental system stock screener and trading system builder. New Forex and Index data.