Daily Market Commentary: S&P Defends 50-day MA But Bearish Turn

It's going to be a busy couple of days for 50-day MAs for all indices. The S&P was able to defend its 50-day MA, but not before gapping down off the open and trading a confirmed distribution day. The increase in selling volume was enough to register a 'sell' for on-balance-volume.


via StockCharts.com

The Dow took weakness a step further by breaking below its 50-day MA on a net bearish turn in technicals. Worse to come?


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The Nasdaq started with an opening gap to yesterday's low and closed the day at the same level, but it was unable to make a significant impression into yesterday's trading action. A test of 50-day MA is likely Wednesday.


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The Percentage of Nasdaq Stocks above the 50-day MA is caught in a tight range, but this looks destined to break lower given the negative technical picture. Should it do so it would weigh on any test of the 50-day MA in the parent Nasdaq.


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The semiconductor index lost last week's breakout with a bull trap with a new MACD trigger 'sell' and bearish divergence in MACD and CCI. This spells trouble for the Nasdaq and Nasdaq 100.


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The Russell 2000 moved further away from 736 resistance and is toying with 20-day MA support. Despite the earlier MACD trigger 'sell' the technical picture remains on the bull side, but if 710 was to break it would shift the rally into a more defensive mode.


via StockCharts.com

Trouble brewing - tests of 50-day MAs will be critical but given the break in the Dow it might prove to be a fruitless defense.

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