Daily Market Commentary: Large Caps Sell Off

It was billed as a slump, but markets experienced losses well within their bullish boundaries.

The Dow Jones Industrial Index experienced the largest loss, but it stopped at its 50-day MA, and above horizontal support. With the exception of stochastics, all technicals are bearish. However, bulls maintain their advantage unless support is lost.


The S&P didn't suffer the damage of the Dow, and is trading inside the horizontal channel with additional support available at the 50-day MA.  The big kicker is the large relative loss to the Russell 2000; it's effectively falling off the cliff.


The Russell 2000 experienced losses which stopped right on horizontal support. Technicals are still bullish as the 20-day MA lends support. 


The Nasdaq had the strongest finish, closing near its open price (but still down on Wednesday's close).  Today's low successfully held channel support.


The indices are still best set up for bulls. Despite today's selling, all indices successfully tested support. Tomorrow provides another opportunity for bulls to continue the afternoon recovery; Large Caps have the most ground to make up.

---

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!

Popular posts from this blog

S&P "Bull Trap"?

Image
I thought there was sufficient evidence to argue against a "bull trap" in the S&P, but it would appear the market wasn't interested in such thoughts and sellers were quick to reverse the initial push above 4,200.  Adding to the pain were new 'sell' triggers in MACD and On-Balance-Volume, although the former occurred above the 'bullish' zero line, making it a weak signal. Selling volume ranked as distribution as selling momentum picked up speed.  The index is also underperforming relative to the Russell 2000. 
Read more

"Black Candlesticks" are a concern for the S&P and Nasdaq

Image
A bright start for bulls on the back of positive $NVDA earnings wasn't enough to generate a day of meaningful gains.  However, it did help stall the losses of the last couple of days. The Nasdaq was the biggest beneficiary of today's action, but not enough to see an end-of-day finish that cleared last week's swing high, nor delivery of a large white candlestick, despite the morning breakout gap.  Technicals are net bullish and relative performance against the S&P has become consistently stronger since the start of May.  While today's candlestick I would view as typically 'bearish', today's volume ranked as confirmed accumulation (bullish). Overall, I would be looking for higher prices from here. 
Read more

Round 2 for the bearish "black" candlestick in S&P and Nasdaq

Image
The Nasdaq started brightly but ended up closing below its open price, but above yesterday's close. The S&P did something similar, although the intraday range is narrower. These two setups are somewhat complicated by the new 'buy' triggers in On-Balance-Volume for both the Nasdaq and S&P. And the new MACD trigger 'buy' for the S&P. Price action is key, so I would expect the candlestick to trump the technical picture; watch for lower prices tomorrow.
Read more

Archive

Show more