Daily Market Commentary: Ugly!

Internet due on Friday - so hopefully back in the swing then. Just a quick note on yesterday's selling. Poor manufacturing and private-sector hiring data thrusted a knife into the heart of the market. This resulted in many market charts showing evidence of possible head-and-shoulder tops.

Zignals Chart Image

The Russell 2000 had left a 'Bear Trap' following an earlier break of neckline support. But this 'Bear Trap' is now under pressure from a whole new slew of sellers. The low of the 'Trap' is the do-or-die line for buyers of the past few weeks.

Zignals Chart Image

However, bulls can take some heart. Markets have been effectively range bound for 2011. January/March reaction lows are more important levels of support than the aforementioned head-and-shoulder patterns. The 200-day MA for many indices are also converging on these reaction lows - another positive for bulls.

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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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