Support break for Nasdaq and S&P
Indices have gone from new high breakouts, to 20-day MA tests, to breaks of trendline support - weakening at each step along way.
The Nasdaq finished Friday with a loss of the 50-day MA after trendline support gave way on Thursday. Friday's volume was relatively light, but there was confirmed distribution on Thursday's selling. Technicals have taken a marked step lower, especially the MACD - although On-Balance-Volume is hanging on to its 'buy' signal. Intermediate stochastics [39,1] just undercut its mid-line, although a rally tomorrow would be enough to see this as the start of support for a secular trend pullback (although such a pattern would take time).
Can bulls make it back above support? Further losses will confirm the support break and force weak hands to sell - fueling more selling. The next logical support point are 200-day MAs, but it would take a big percentage loss in indices to get there.
You've now read my opinion, next read Douglas' blog.
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