Profit Taking
While volume climbed to rank as distribution there wasn't a significant relative loss for markets. However, the selling perhaps marks an indication that the summer lull is a maximum for the Brexit recovery.
Today's selling started yesterday and continued through the day. The S&P shows this with the Inverse Hammer followed by today's red candlestick combo. The support line from the Jobs Data breakout hasn't been breached and this may be enough to keep longs in their positions. However, a weak open tomorrow could open the flood gates, and a loss of 2,160 may see others pile in.
The Nasdaq saw a recent 'sell' trigger and this was compounded by today's distribution selling. Other technicals are healthy, but the index lacks a natural support level for value buyers to step in. The 50-day MA near psychological 5,000 may be the best dip-buyer spot.
There was a straight reversal of yesterday's gain for the Russell 2000. These two-bar reversals can mark tops, but there needs to be follow through with another down day to confirm. Shorts may go aggressive with a stop at 1,245 with position size depending on the entry price relative to risk.
What happens tomorrow may largely be determined by the opening half-hour. A gap down and/or sell off during this period may be enough to see such selling last throughout the day.
You've now read my opinion, next read Douglas' and Jani's.
I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro,
register through the banner link and search for "fallond".
If you are new to spread betting, here is a guide on position size based on eToro's system.
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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 for ChartDNA.com, and Product Development Manager for FirstDerivatives.com. I also trade on eToro and can be copied for free.
Today's selling started yesterday and continued through the day. The S&P shows this with the Inverse Hammer followed by today's red candlestick combo. The support line from the Jobs Data breakout hasn't been breached and this may be enough to keep longs in their positions. However, a weak open tomorrow could open the flood gates, and a loss of 2,160 may see others pile in.
The Nasdaq saw a recent 'sell' trigger and this was compounded by today's distribution selling. Other technicals are healthy, but the index lacks a natural support level for value buyers to step in. The 50-day MA near psychological 5,000 may be the best dip-buyer spot.
There was a straight reversal of yesterday's gain for the Russell 2000. These two-bar reversals can mark tops, but there needs to be follow through with another down day to confirm. Shorts may go aggressive with a stop at 1,245 with position size depending on the entry price relative to risk.
What happens tomorrow may largely be determined by the opening half-hour. A gap down and/or sell off during this period may be enough to see such selling last throughout the day.
You've now read my opinion, next read Douglas' and Jani's.
I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro,
register through the banner link and search for "fallond".
If you are new to spread betting, here is a guide on position size based on eToro's system.
---
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 for ChartDNA.com, and Product Development Manager for FirstDerivatives.com. I also trade on eToro and can be copied for free.
