Daily Market Commentary: Selling Continues

With the Russell 2000 offer a precedent with a new lower low it went one step further with breaks of 50-day and 200-day MAs.  Technicals continued to deteriorate with a net bearish turn likely to happen over the next  couple of days.  However, the index did manage to finish the day with a back test of former declining resistance defined by March / April swing highs.

The S&P lost rising support of its channel but managed to hold on to its 50-day MA despite the higher volume selling (distribution).

The Nasdaq also had a tight call.  Tuesday's selling finished a shade below its 50-day MA and channel support, but is close enough to see an early morning rally regain this support. Technicals are a similar poor shape as the S&P with bearish 'sell' triggers in the MACD, On-Balance-Volume and Directional Index.

With today's weakness there is a decent opportunity for a rally to regain some of the momentum lost from last week.  The overall outlook is more bearish, but there is workable support for the S&P, Russell 2000 and Nasdaq to place long positions.


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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 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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