Selling Extends For A Third Day

Indices extended loses for a third day but didn't change the picture from yesterday. The S&P is still sitting on a support level of the former channel as On-Balance-Volume extended on yesterday's 'sell' trigger.

 

The Nasdaq confirmed its 'bull trap' but it still has a support level from the last swing high to use. Technicals remain net bullish with relative performance particularly strong.

 

The Russell 2000 has plenty of room for maneuver although buyers looking to take advantage of the 3-day pullback can probably wait a little longer.

 

The Dow Jones worked support at the rising 'bull flag' but is still vulnerable. John Murphy of stockcharts.com sees this as a triangle (part of a 4th Elliot Wave); if this is true then look for an upside breakout. My preference is to look for a downside move but the market will ultimately determine the break.  Technicals favor 'bears'.

 

The Semiconductor Index experienced the very slightest of selling and may be at a pullback buying opportunity Stops go on a loss of 1,415.

 

For tomorrow, bulls can look to the Semiconductor Index, Swing traders can try the S&P or Dow Jones, and shorts the Nasdaq or Nasdaq 100.

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