Daily Market Commentary: Support Breaks

Lots went on today, but the general summation was for a broad break of support across indices.

The S&P suffered heavy volume distribution as the double inside day broke down. Losses in the S&P took it below its 50-day MA. On-balance-volume triggered a 'sell' signal. Relative strength shifted away from speculative small caps to safer large caps, despite losses to large caps.

($SPX)

via StockCharts.com

The Dow, the most consistent of the main indices, broke through rising support.

($INDU)

via StockCharts.com

Tech indices gapped down strongly on heavier volume. Technicals for the Nasdaq and Nasdaq 100 turned net bearish. With 50-day MAs breached there is little support to look too other than 200-day MAs.

($COMPQ)

via StockCharts.com
($NDX)

via StockCharts.com

The semiconductor index gapped down strongly having cleared the 50-day MA the day before; technicals were left net bearish. Best hope for bulls is for a sideways consolidation, although the 200-day MA is looking an attractive target given the extent of recent losses.

($SOX)

via StockCharts.com

Finally, the Russell 2000 broke channel support and its 50-day MA. Despite losses, an extension towards a sideways market seems a more likely outcome, but it offers little optimism for buyers.

($RUT)

via StockCharts.com

Today was the first real bearish day in quite a while. Whether it develops into something more substantial remains to be seen - but it was a worrying start.

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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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