Daily Market Commentary: Weakness Continues

Yesterday's huge losses had the potential for a counter rally but after a weak attempt to regain support, sellers returned in the last hour of trading. With losses over 1% there is no doubt support has broken.

The S&P is very close to a "Death Cross" between 50-day and 200-day MAs although today's selling volume was light.


via StockCharts.com

Will the former resistance line help as support for the Nasdaq? Buy the open and use a 1% stop - sell on test of 20-day MA.


via StockCharts.com

The Dow is offering a similar buying opportunity to the Nasdaq.


via StockCharts.com

The Russell 2000 failed to cling on to support and followed the other indices lower. But if other indices rally tomorrow will it create a 'Bear Trap'?


via StockCharts.com

It's hard to say whether the buying opportunities available in the Nasdaq and Dow will prove fruitful given a similar test in the S&P failed. A series of sharp down days has left markets oversold on the short term and primed for a rally to 20-day MAs (as a start). Whether anything more substantial could come out of a rally is another matter. Check out Richard Lehman's charts to see the bearish bigger picture.

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