Daily Market Commentary: Further Light Losses

Next week will set the real tone for the year, but for Friday it was yet another day of modest losses. The only index to escape the selling was the Russell 2000.  It managed to finish with a small gain as it started the day nearer to support.

The gain in the Russell 2000 didn't change the technical picture a great deal, although it did enjoy a substantial jump in relative strength against Tech indices, and to a lesser degree, Large Caps.  Will this shift help reverse a two month relative underperformance to these indices?

The S&P posted the smallest loss on the day. The 'sell' trigger in On-Balance-Volume was the only bearish marker.

The Nasdaq suffered the largest loss on the day, but has the most bullish technical picture. Monday may see 'sell' triggers in the MACD and On-Balance-Volume but it would take another downday to trigger this.

The Nasdaq 100 already suffered the bearish 'sell' trigger in the MACD and On-Balance-Volume. Watch for a test of the 20-day MA on Monday.

Monday may see further downside as indices approach 20-day MAs. Selling volume has been very light, suggesting it will take very little on the part of buyers to drive this indices back to new highs. As before, profit taking is the name of the game.


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