Monday, June 28, 2010

Daily Market Commentary: Bulls Afraid to Buy

Friday's heavier volume buying in the S&P did not lead to upside follow through. The 20-day MA has started to tick down which is usually the start of something worse; will 1,088 (20-day MA) be sold off on a challenge Tuesday? The MACD is close to a 'sell' trigger but it well below the bullish zero line.



The Nasdaq remained pegged by converged 20-day and 200-day MAs with a technical picture which is a mirror image (and with the same issues) as the S&P



The Russell 2000 is holding on to its 200-day MA but is oddly pressured by the 20-day MA; bulls has made a good stand at the 200-day MA on Friday so the lack of some follow through is a concern. CCI holds rising support.



Much rides on the semiconductor index for the Nasdaq and Nasdaq 100. While it holds above the 200-day MA it is on the verge of turning net negative technically.



Although breadth indicators like the Percentage of Nasdaq stocks above the 50-day MA (and number of breakout stocks) suggest a tradable bottom is in place.



For Tuesday, the Russell 2000 and its 200-day MA is the index to watch, followed by the Nasdaq 100, and then the semiconductor index. Bulls edge it on the short term, but it's a traders (not investors) market.

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