It was another roller coaster ride yesterday as the market moved erratically in response to divided opinions about the severity of the downturn and new rumors about Lehman Brothers. The S&P 500 (^SPC) still has to put in a determined run to break free from the descending trend line and on the other hand, at least on present showing, there does not appear to be great conviction amongst the bears about re-testing key support levels.
Some comfort will be taken in the bullish camp from the overnight performances in Asia where the Nikkei 225 moved ahead by 1.7% and the Hang Seng Index (^HSI) , with an advance 0f 2.7% looks ready to test overhead resistance at the 50 day EMA.
Several of the large tech stocks pulled back rather sharply and the mood was not helped by weaker than expected earnings and outlook from Oracle. The Nasdaq 100 (^NDX) gave back 2.2% yesterday and yesterday's range covers the span between the 20- and 50-day EMA's.
Alcoa (AA) looks vulnerable after recently recording a lower high and with a developing flag formation.
Salesforce.com (CRM) has pulled back to potential support at the convergence of two moving averages.
Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market. He specializes in market neutral investing and and is currently working on a book about the benefits of trading with long/short strategies, which is scheduled for publication later this year.
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