Daily Market Commentary: Markets Stall on Holding New Highs
After three days of gains it was going to be difficult for markets to secure a fourth given debt ceiling fears. Volume climbed to register a distribution day, although overall volume was not particularly high (just high relative to recent buying volume).
The S&P finished with a 'bearish engulfing pattern', look for further losses tomorrow.
However, there was an improvement in Nasdaq breadth: the Percentage of Nasdaq Stocks Above the 50-day MA turned net bullish, with nearly 67% of Nasdaq Stocks trading above their 50-day MA.
Which helped contain the selling in Tech indices and keep the pressure on for a probable breakout:
While the Nasdaq 100 tagged channel resistance in what could amount to a brief short play to the 50-day MA.
The Russell 2000 finished with a possible 'bull trap'. Today's selling pulled back yesterday's breakout and has set things up for a test of the 20-day MA.
Shorts will likely keep control of the market into the end of the week. A debt deal solution looks priced in, so only downside looks on offer - there may be a 'sell on the news' even if a debt deal is announced. However, the broader trend is bullish, so any weakness will likely only be short term. An intermediate term shift in favour of bears would require a break of October swing lows.
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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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The S&P finished with a 'bearish engulfing pattern', look for further losses tomorrow.
However, there was an improvement in Nasdaq breadth: the Percentage of Nasdaq Stocks Above the 50-day MA turned net bullish, with nearly 67% of Nasdaq Stocks trading above their 50-day MA.
Which helped contain the selling in Tech indices and keep the pressure on for a probable breakout:
While the Nasdaq 100 tagged channel resistance in what could amount to a brief short play to the 50-day MA.
The Russell 2000 finished with a possible 'bull trap'. Today's selling pulled back yesterday's breakout and has set things up for a test of the 20-day MA.
Shorts will likely keep control of the market into the end of the week. A debt deal solution looks priced in, so only downside looks on offer - there may be a 'sell on the news' even if a debt deal is announced. However, the broader trend is bullish, so any weakness will likely only be short term. An intermediate term shift in favour of bears would require a break of October swing lows.
---
All Contributions Welcome - Thank You!
Follow Me on Twitter
Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
You can read what others are saying about Zignals on Investimonials.com.
JOIN ZIGNALS TODAY - IT'S FREE!
