Range Bound Trading

Yesterday's recovery followed with further highs, but then buyers went AWOL and things settled back to the day's lows. Rinse and Repeat.

The S&P has nestled itself against rising trendline support as today's action registered as confirmed distribution.  Tomorrow, bears will be seeing if they can break the trendline, but I won't be holding my breath.

The Nasdaq tagged resistance and remains below the rising wedge. The 'bear trap' is still in play, but there needs to be a return inside the rising wedge if this is to be confirmed.  A move above 5040 opens up for a challenge of high at 5119.

The Russell 2000 is at channel resistance, so the next move will either confirm resistance or deliver a breakout. Should this break upside, then the 'Death Cross' between 20-day and 50-day MAs will quickly come into play as alternative resistance.

Another index at resistance and looking better as a shorting prospect is the Semiconductor Index. There is converged resistance of the channel, 50-day MA, and 704. Shorts may see some joy here tomorrow.

For tomorrow, the S&P may offer bulls a chance at trendline support. Shorts can look to the Russell 2000, Nasdaq and Semiconductor Index.

You've now read my opinion, next read Douglas' and Jani's.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com, and Product Development Manager for ActivateClients.com. I do a weekly broadcast on Friday's at 13:30 GMT for Tradercast, covering indices, FX and gold, silver and oil - all are welcome! You can read what others are saying about Zignals on Investimonials.com.


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