Technical Damage to Stocks

Discussion in 'Technical Analysis' started by Eagletrader, Feb 9, 2006.

  1. Since last weeks breakdown on SPX & NDX, markets around the world have had fairly significant pullbacks. I waited for a day of bounce to examine the extent of technical damage during this decline. As noted earlier, other markets represented by the RUT & NYA, as well as international markets continued to show relative technical strength till recently.

    The NYA has since decisively broken its uptrend from October, complete with MACD & CCI divergences. The moving averages have now flattened signifying a period of consolidation at the least.

    SPX has now been dealt a fairly severe techical blow and hasn't done enough to work off the negative momentum. Even if it can rally above the moving averages in the short term - it should for now be viewed as countertrend with more down side to come.

    Charts & Comments