Wednesday, April 11, 2012

Daily Market Commentary: Significant Distribution

The low key selling of recent days gave way to more earnest profit taking as indices saw support breached.

The S&P made a clean slice of 1,376 and 50-day MA support as technicals turned net bearish.  Should the decline make it below 1,340 it will create a new swing low for the November-March rally and likely start a sideways consolidation pattern (ending the rally).

The Nasdaq took a slightly heavier hit that the S&P, but it was able to hold 50-day MA and breakout support. While technicals weakened they haven't turned net bearish.

The Russell 2000 took the biggest hit with a -2.40% hit. The index had long since said goodbye to its March breakout and 50-day MA.  The declines logical conclusion is a test of its 200-day MA, although technicals are close to oversold.  Today's low edges a new swing low, although a sideways consolidation would be favoured.

It has been almost a month since selling volume was as great as it was today. The good news for bulls is a swing low is not far off.  The bad news is it will have a sizable amount of ground to make up before it can post new highs.


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Dr. Declan Fallon is the Senior Market Technician and Community Director for 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 Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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