Pause in Buying as Indices Give Back Yesterday's Gains
Markets returned most of the ground gained yesterday in what could be the start of the next pull back. The percentage loss may have made some headlines, but the damage to the charts was relatievly minor.
The S&P edged just below the 200-day MA with a 'sell' trigger in On-Balance-Volume. If the selling continues I would be looking for a test of former declining resistance - now support, which is also close to its 20-day MA.
The Nasdaq held on to 50-day MA support as it maintained net bullish technical strength. While further losses will likely change this, there is still a robust rally as technicals show a level of strength not seen in months.
The Russell 2000 also eased away from its resistance test as it enjoys a marked improvement in technical strength. It's unlikely today's loss will come back as far as the early March decline, but a tag of the 20-day MA might offer a good buying opportunity.
On paper, today looked a bad day, but the damage to the charts was relatively minor. This weakness looks better as a buying opportunity, bulls will only have to wait for a bullish candlestick - preferably one near a key moving average.
You've now read my opinion, next read Douglas' blog.
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