Daily Market Commentary: Bears Remind Bulls They’re Back
Courtesy of Fallond Stock Picks
It was set up for a bull defense from key moving averages, but in the end it was bears who grabbed the market by the scruff of the neck. The S&P has come back to a backtest of breakout support – a good opportunity for buyers to make another stand – especially after four days of selling.
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The Nasdaq was similarly pained; cracking through both 20-day and 200-day MAs on heavier volume distribution. It hasn’t the proximity to backtest support to suggest a positive reaction tomorrow, but four days of selling will make it hard to push it to five given prices have dropped into the scrappy late May-early June trading range. A day of indecision perhaps?
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Small Caps dropped down and just below the 200-day MA. The only index with a conventional moving average and backtest support to work. The best longside opportunity for the next few trading days?
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The Nasdaq 100 was a little mixed. The 200-day MA is there to offer support but today’s action confirmed a bear trap from the break of declining resistance.
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While four days of selling suggests bulls won’t have to do too much to trigger some level of short covering – particulary for Small Caps. However, the next bounce may not last very long, which is a worry, given the ease key moving averages were sliced.
