Daily Market Commentary: Further Losses

There was to be no recovery of the 50-day MA.  The S&P marked an intraday high which was equivalent of the 50-day MA, but that was as far as it got. The eventual lower close was accompanied with a net bearish turn in technicals. The only thing going in its favour is the growing relative strength towards Large Caps and away from Small Caps (despite the recent reversal).

The Nasdaq finished relatively flat; today's range fell inside that of the past week and remained below the 20-day MA. However, the index is caught in a no-mans land between 20-day and 50-day MAs. In addition, volume climbed to register a distribution day

The Russell 2000 was the only index to finish at its 50-day MA, if just barely. It remains the best long side opportunity of the key indices; stop on a loss of 1,013.

For Thursday, Longs should stick with the Russell 2000. Shorts may look at the Nasdaq with a stop on push above the 20-day MA.


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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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