Stock Market Commentary: No Follow Through Lower

Markets closed higher, undoing the bearish challenge of yesterday and reinstating the reversal characteristics of last Friday. For the Nasdaq the narrow downward channel hasn't broken but it finished Tuesday on resistance with an indecisive doji on higher volume. The doji is good swing opportunity with a stop 1% on the flip-side lows; given the oversold nature of the market the break should be higher


Favouring the upside break for the Nasdaq is the channel breakout for the semiconductors


The recovery in large caps was pegged by resistance created by the prior reaction low but technicals favour a bounce.


Market breadth is firmly down, so a retest of last Friday's lows is still a distinct possibility. The long term breadth picture is showing significant weakness with a stronger market bottom some distance off.



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