Daily Market Commentary: Snooze Fest

Very little to report on today. Markets eased back after a series of straight gains had kept bullish momentum to the fore. Losses in the S&P came on technical heavier volume, but hardly enough to rank as distribution - nor enough to suggest sellers were in control. Technicals remain healthy.


via StockCharts.com

It was the same story for the Nasdaq. It's recent MACD 'buy' strengthening to the upside. The volume selling had a stronger hint of distribution than for the S&P, but not enough to be an outright worry.


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Where concerns lie is with the Percentage of Nasdaq Stocks above the 50-day MA. There is mounting pressure with fewer stocks supporting the rally. At the October peak, 70.6% of Nasdaq stocks traded above their 50-day MAs. Today this figure stands at 58.7%. During this time the Nasdaq has added close to 10%.


via StockCharts.com

Finally, the Russell 2000 is trading close to former channel support turned resistance. Technicals are healthy, but a natural supply level is fast approaching.


via StockCharts.com

With Market Breadth weakening it's only a matter of time before this is reflected in parent markets. For now, trade the trend and use channel support and/or 20-day MAs as areas to buy and/or place stops.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Zignals Trading Strategy Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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