Daily Market Commentary: Sellers Pay a Visit

The swing trade opportunity sided with the bears, but for Large Caps it wasn't a big swing. The S&P maintained its breakout, and could take another loss and remain above breakout support. Technicals are still net bullish, which makes the short play a weak one.

The Nasdaq took a more substantial hit in a clearer short play. However, losses took the index a shade below breakout support (but not enough to register as a confirmed breakdown).

The Russell 2000 finished with a bearish engulfing pattern, undercutting the 20-day MA by the close. The challenge on the all-time high may have to wait until there is a fresh test of the 50-day MA.  However, the Russell 2000 is in a scrappy phase without a clear advantage to one side or the other.

Tomorrow is set for further losses, particularly for the Russell 2000 and Nasdaq, but does so within the larger context of a (neutral/non-directional) consolidation. Bears will have a tougher time influencing Large Caps, with the Dow set to breakout and the S&P holding (so far) its breakout. Not a great environment to trade.


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