Friday's Gains Reversed
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You've now read my opinion, next read Douglas' and Jani's.
It looks like longs weren't prepared to wait for a test of Oct-Dec trading ranges before dumping their positions. Instead, longs took advantage of nascent strength to sell existing positions. If there was a bullish take from this, then it's that selling volume was lighter, which may give bulls something positive to hold on to.
What today's action suggests is that a move back to last Wednesday's spike lows would appear to be necessary to firm if support - if such support exists. Unfortunately, such a test would break up September's low as trading range support, and open up the possibility for a measured move lower (i.e. the height of the Sep/Oct - high/low differential, projected lower).
The Nasdaq also registered a 1.5% loss. It too is looking like a January swing low test is on the cards.
The Russell 2000 experienced the heaviest loss, handing over 2% of losses and stalling at resistance. It's going to take more to generate a 'bear trap'. For now, bears are in control.
Today will likely have pushed potential buyers back to the sidelines. Many will wait for a retest of last week's lows to jump, and it's hard to see buyers wanting to commit before then.
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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 also trade on eToro and can be copied for free.
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You've now read my opinion, next read Douglas' and Jani's.
What today's action suggests is that a move back to last Wednesday's spike lows would appear to be necessary to firm if support - if such support exists. Unfortunately, such a test would break up September's low as trading range support, and open up the possibility for a measured move lower (i.e. the height of the Sep/Oct - high/low differential, projected lower).
The Nasdaq also registered a 1.5% loss. It too is looking like a January swing low test is on the cards.
The Russell 2000 experienced the heaviest loss, handing over 2% of losses and stalling at resistance. It's going to take more to generate a 'bear trap'. For now, bears are in control.
Today will likely have pushed potential buyers back to the sidelines. Many will wait for a retest of last week's lows to jump, and it's hard to see buyers wanting to commit before then.
---
Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.
Follow Me on Twitter
Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com, and Product Development Manager for ActivateClients.com. I also trade on eToro and can be copied for free.
JOIN ZIGNALS TODAY - IT'S FREE!
