Big Sell-Offs But Confirmation Still Required
Declan Fallon | Mar 26, 2015 12:37AM ET
Yesterday was a difficult day for bulls as sellers swarmed out of the gates. Volume climbed to register distribution across all indices as technical weakness expanded.
The S&P finished the day below its 50-day MA, but hasn't yet challenged support of the March swing low at 2,039. If a double top is to emerge, then a close below 2,039 is required; if this plays true, look for a downward target of 1,965. Technicals already point in shorts' favour with a MACD 'sell' trigger and bearish cross of +DI / -DI.
The NASDAQ experienced an even bigger loss. It will reach the swing low at 4,842 at the same time as it tests its 50-day MA today. In addition, the MACD trigger 'sell' coincided with a bearish cross between +DI and -DI. Should buyers fail to emerge at 4,842, then the 200-day MA at 4,607 comes into play.
The Semiconductor Index lost nearly 5%, undercutting trend support and the 50-day MA in the process. A MACD trigger 'sell' joined other such triggers in the indices. It was also the first index to undercut the March swing low.
The Russell 2000 finished yesterday with a 'bull trap' and a 2.34% loss. However, the damage to this index was not as great. The swing low of 1,206 remains far away, and the 50-day MA too. The index did close below the 20-day MA, but it's close enough to the 1,243 high to reclaim it. A push back to 1,243 will open the opportunity for a bearish head-and-shoulder pattern. For this to be true there can't be much follow-through above 1,243 in today's session, and the neckline becomes 1,206.
Get The News You Want
Markets appear to be setting up for double tops, and a broadening of trading ranges established from the time of the 'Santa Rallies.' Meanwhile, it may take a challenge of 200-day MAs to re-awaken bulls.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.