Relief Rally fades across indices
Markets lost ground, with the S&P reversing off trend resistance and the Russell 2000 doing a tag repel from converged 20-day and 50-day MAs. Selling volume only ranked as distribution for the Russell 2000, but was not particularly heavy.
The S&P marked a picture perfect reversal with bearish technicals for the MACD, On-Balance-Volume and ADX. Bulls will look to the 50-day MA, an area of past support in March and more recently in May, but each repeated tag of this support level increases the opportunity for it breaking.
The Nasdaq reversed before tagging either trendline resistance or its lead moving averages. Technicals are net bearish. If losses continue to tomorrow it would introduce the possibility of a measured move to 12,400 or a test of the 200-day MA. This would keep things in line with a trading range.
You've now read my opinion, next read Douglas' blog.
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