Monday, February 25, 2013

Daily Market Commentary: Well - That Didn't Last

I was expecting a little more from bulls than a single days recovery, but it wasn't to be. Volume climbed to register a distribution day as shorts jumped on the push back towards 20-day MAs. After today's selling, 50-day MAs are now the next downward targets.

The Nasdaq gapped over its 20-day MA, but finished just a few points above its 50-day MA. Tomorrow is a key day for the average; a loss of the 50-day MA means the 200-day MA at 3,009 is in play.

The Percentage of Nasdaq Stocks Above the 50-day MA gained a little ground, but technically is net bearish. Worse to follow...

The Russell 2000 took the biggest loss on the day with over 2% trimmed off the index. It's still well above its 50-day MA, but I would expect a test of this key moving average (given the events of the Nasdaq).

The S&P was not left out of the selling. It will likely test its 50-day MA before the Russell 2000, but after the Nasdaq.

The top is in place. Buyers likely won't make an appearance until Indices are at least 10% off their highs.  Ideally, I would like to see indices 10% away from their 200-day MAs. but this will be a tall ask.


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Dr. Declan Fallon is the Senior Market Technician and Community Director for You can read what others are saying about Zignals on