Tuesday, January 12, 2010

Stock Market Commentary: Coming Back to the 20-day MAs

Significant volume selling reversed Friday's push higher and brought the indices closer to their 20-day MAs. There was some technical weakness with the MACD trigger 'sell's for the MACD and on-balance-volume; plus a shift in relative strength to less risky large caps (S&P)

Nasdaq 100 also flashed a MACD trigger 'sell'

Small Caps retained their breakout and market leadership role

But semiconductors followed through on Monday's sell triggers and cut its 20-day MA. Large losses like the one today have a habit of backtesting the prior high, but it looks like the semiconductors are not going to be contribute to the support of rallies in the Nasdaq and Nasdaq 100 for the next couple of weeks at least.

Can the 20-day MAs lend themselves to support once more? SOX action suggests not, but tomorrow will be interesting.

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