Courtesy of Declan.
The day started with bulls enjoying a positive start, but much of these gains were clawed back by the close. The Nasdaq had the best of the action, doing enough to finish above yesterday’s close – but not enough to finish at the day’s highs. Instead, Tech averages left an ‘inverse hammer’ in what is looking like committed bearish action.
Large Caps finished at the lows and is knocking on the door of another leg lower. Technicals are bearish, but close enough to oversold to suggest a bounce soon. Watch for a washout, like a doji or bullish hammer, to mark a bottom for these indices.
The Russell 2000 finished near recent lows and below its 50-day MA. There is support at 1,190 to lean on, but after that there is the 200-day MA. Relative performance has dropped through the floor, but it has been scrappy throughout the summer. Action has the look of a trading range low, but bulls need to make a stand if this is to be proven true.
For tomorrow, watch for washout swing lows for Large and Small Caps. It may prove to be a relatively uneventful day for the Nasdaq/Nasdaq 100.
You’ve now read my opinion, next read Douglas’ and Jani’s.
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