Daily Market Commentary: Breakout Failures
Courtesy of Fallond Stock Picks
Yesterday’s weak end-of-day followed through to the downside, knocking out breakout support for many of the indices and 200-day MAs too (Large Caps). If there was some compensation it was the low volume associated with the selling.
The selling wasn’t enough to prevent a ‘sell’ trigger for on-balance-volume with the directional index close to a bearish cross.
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The Nasdaq hasn’t quite broken its 200-day MA and is in fact very close to a bull cross of the 200-day MA by the 20-day MA; 2,249 is the watch area.
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The Russell 2000 had one of the biggest losses on the day, but it is still well above its 200-day MA at 636.7
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Finally, the semiconductor index went from net bullish (technically) to an early ‘sell’ trigger. There is plenty of wiggle room for bulls to work with, first of which is the 20-day MA.
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For Wednesday look for bulls to rally back, likely close to – or just below – 20-day MAs. Support connecting February-June lows is hugely significant and must be defended; break these lows and it could get ugly quick.
