Daily Market Commentary: Could Have Been Worse
Courtesy of Fallond Stock Picks
By early afternoon it was looking all rather shaky for bulls, particularly for Small Caps (Russell 2000), but in the end the rot never set and markets held their ground. Loses were relatively minor but there was confirmed distribution for the Nasdaq and Nasdaq 100. However, even the losses in the Nasdaq were less worrisome given the ‘Golden Cross’ between 20-day and 50-day MAs.
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Losses in the S&P didn’t break former channel resistance turned support.
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And while it was looking bad for the Russell 2000 it was able to hold the 200-day MA with a ‘Golden Cross’ between 20-day and 50-day MAs. However, there was a ‘sell’ trigger in the CCI and 672 is looking firm resistance.
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Once again, semiconductors were left in the worst state. The days’ modest losses were enough to leave a potential bull trap behind – although in reality it’s more likely to morph into a new trading range; time will tell. Technically, there were ‘sell’ triggers for the CCI and ADX.
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Today gave us the opening weakness, but not the hard drop. It still looks probable tomorrow will continue the selling and whether it proves to be a temporary event will be governed by the volume. Bulls will want light volume selling, bears will want to crack the nascent trading range breakouts – confirming supply zones.