Trading Action Tightens As Selling Stalls (a little)

There wasn't a whole to today's action - which is probably a good thing.  There was no follow through lower, instead markets traded in a more neutral manner with a set of narrow range doji. 

The Nasdaq held on to Friday's lows with a new 'sell' trigger in On-Balance-Volume.  I have marked support at 13,885, but where it's out now is probably enough to consider it close enough to just support; a small gain tomorrow would be enough to regain this support. 

The S&P had made a clean break of support with a close below its 200-day MA on Friday. Today, it finished with a small bullish 'hammer'. The small loss kept existing technicals negative, but not enough to trigger a new 'sell' trigger in the MACD.  The S&P continues to underperform relative to the Russell 2000. 

The Russell 2000 dropped out of support on light volume. The MACD trigger 'buy' is maintained and the index still holds 20-day MA support.  The index is the canary-in-the-mine for a bear market and has held up reasonably well on recent selling. A move above $207.50 would effectively negate the January sell off. 

Today's non-event was a positive for the markets, although it will take more than a one day stalling action to stop a sell off.  A respectable start to the week if you are of the bullish persuasian (and there doesn't appear to be too many of those about).

You've now read my opinion, next read Douglas' blog.
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