Thursday, September 23, 2010

Daily Market Commentary: Harder Losses

Indices took another hit and are trading at or below Monday's low. On the bright side, selling volume was not very high. The S&P left what may evolve into a bull trap. The rising channel line has been breached, but a horizontal support line connecting June/August reaction highs is holding.



The Russell 2000 came back to its 200-day MA but there was a worrying push to new lows in relative strength to the Nasdaq; suggests there is more downside in the tanks.



However, this time the semiconductor index may help. It challenged its 50-day MA for a second time and is well positioned to break higher tomorrow.



The semiconductor index may help the indices tomorrow but the selling has the look of lasting another day. But it's not plain sailing for bears; there is workable support and a bullish engulfing pattern could emerge given the general timid selling volume today.

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