Has the momentum been knocked out of the bounce already?  The losses were attributed to " weakness in Material and Energy " sectors, but these sectors were already on the ropes going into today. In my estimate, Materials are closer to a bottom than any other sector. The S&P closed flat after managing decent gains intraday, but trading volume was relatively light so it's a mixed bag as to whether the late day drop will be something to worry about.  Technicals aren't even indicating a bullish divergence and the 200-day MA wasn't tested. The Nasdaq closed slightly down on yesterday, but it hadn't achieved the same degree of intraday gains as the S&P so its loss wasn't as great.  Volume wasn't much different to yesterday. And like the S&P the technical picture is lacking the bullish divergence which might indicate a swing low. Of greater help to the Nasdaq are the more pronounced bullish divergences in Nasdaq breadth indices like th

After days of selling it had to happen bulls would get one day of joy.  The only problem was the lack of volume. A push to the 20-day MA would offer something for today's buyers as well as give shorts an angle to attack. The S&P didn't quite make it to its 200-day MA.  Neither did the Nasdaq Although the hardest hit indices enjoyed the best of the rebound Monday.  After crashing through its 200-day MA on Friday the Russell 2000 returned over 2% to take back its long term moving average. The semiconductor index also gained over 2%, but it hasn't yet reached a natural support level on which a strong rally can be based, but it may still have enough to see a test of the 200-day MA. Tomorrow will be interesting.  Given the lack of volume it's hard to see the momentum continuing, but an open gap up would not be surprising.  Of the indices, the Russell 2000 has an opportunity to work support off its 200-day MA. ---- Follow Me on Twitter Dr.

Markets were left in an interesting position by Friday's close.  Ordinarily, I like to be a buyer when the S&P is at least 10% below its 200-day MA and sector breadth is in the position it's in, but I think there is enough here to have me jump in on Monday's open and add to my long term positions.   I suspect there will be a big one day gain to help establish the swing low. But I doubt it will be the absolute low for the current decline; at the same time, I don't want to be looking at a swing low with hindsight! Market Breadth is in swing low territory.  The Percentage of Nasdaq Stocks above 50-day MA dropped sharply to 18% although stochastics for this breadth indicator have not yet reached oversold territory.  Although the MACD histogram reached a new multi-year low - lower than the 2008 low. The Nasdaq Summation Index has some way to go before turning oversold based on stochastics, although the Index is close to a swing low based on past occurrences.

It was another day when early gains couldn't hold into the close of business. In further bad news, it was speculative Small Caps and Tech which took the brunt of the selling.  Having said, Large Caps couldn't hold on to their gains and closed at the day's lows. The S&P is been drawn to the 200-day MA as it fights its relative position against Small Caps; at the moment it looks to be winning (which is bad news for those looking for a new leg to the rally). The Nasdaq drifted away from declining support which suggests a possible acceleration in the decline. Likewise for the Russell 2000, which confirmed its break of wedge support. But the semiconductors suffered most with a substantial decline and break of the 200-day MA.  With the loss of the 200-day MA the next buying opportunity won't present itself until relative strength against the Nasdaq 100 swings back in its favour. Certainly there will have been many buyers forced out of their positions

It's just hard for buyers at the moment.  Given the 'Santa Rally' lasted into March it has become hard for sidelined money to commit and all too easy for holders of rally gains to sell. Volume climbed in confirmed distribution - a clear win for the sellers. Large Caps have been the most resilient, although it was interesting to see Small Caps trying to edge the relative strength battle (which if successful would be bullish for the broader market). The Nasdaq gave up on early promise to close near the lows of the day. Again, the index is hugging the declining support line, but the index is in need of a confidence boost. Small Caps attempted to regain support and create a 'bear trap'; but it wasn't able to do so - finishing the day below support. I suspect it will make another run at it tomorrow because the market looks like it wants to go higher. The indices which showed some activity were the Dow which broke support. And the Semiconductor i

All markets experienced another round of selling as Europe dominates the headlines.  The selling wasn't particularly heavy, but it was damaging in taking indices away from support. The S&P is tempted by the siren call of the 200-day MA as technicals drift lower. However, relative strength continued to strengthen against the Russell 2000; so what money is flowing into the market is flowing into Large Caps. The Nasdaq is riding declining support lower, which is cold comfort if you are long.  Bullish divergence in MACD histogram offers an inkling a bounce will happen soon.  Like the S&P, looks ready to test its 200-day MA. The Russell 2000 broke support in a worrying shift after 4 days of holding.  The 200-day MA isn't far away and there is a good chance a 'bear trap' if tomorrow it can break above today's high. The only index left clinging to a trade-worthy support level is the semiconductor index.  Use a loss of the 200-day MA for stop placem

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