Daily Market Commentary: MACD Bull Traps?
For the S&P a test of 1,040 looks inevitable for Tuesday; should this break it will not only mean a break of the flash-crash lows, but of the February reaction low too. Should a rally develop soon (and this looks likely given oversold stochastics [39,1]) then one need look to the possibility of a head-and-shoulder reversal top with a right-hand-shoulder c1,150.
($SPX)
via StockCharts.com
The Nasdaq cracked through its 200-day MA, following on from Friday's "bull trap". Tech experienced a relative strength loss to the S&P, but not enough to change their relative positions to one another.
($COMPQ)
via StockCharts.com
Small Caps also lost their 200-day MA although have room to maneuver down to February lows which are a good 35 points away. However, the bullish divergence in the CCI broke which was one of the few events pointing towards a larger rally.
($RUT)
via StockCharts.com
The most worrying action came from the semiconductor index which broke through the point of convergence of 3 support lines - nasty!
($SOX)
via StockCharts.com
Bears have enjoyed the advantage but until flash-crash lows are breached the net sum of all today's (and Friday's) trading is to leave markets in trading ranges. One marker to suggest flash-crash lows will be broken is the shift in relative strength towards "safer" large caps issues; the S&P and Nasdaq have both been outperforming the Russell 2000 since the start of June.
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