Stock Market Summary Tuesday 2nd October 2012

Posted by Stephen Sutherland on Tue, Oct 02, 2012 @ 11:03 AM
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Yesterday's market action was neutral.

The Nasdaq Composite fell 0.09% in above average volume which on paper does not seem that bad. However when you look at what happened on a chart, you can see that the US tech index bearishly reversed and with volume coming in above average suggested institutional selling (Point A).

Reversals are bearish because they often signal a change of trend. This means the Nasdaq may be indicating that it wants to come down lower. Hopefully though its breakout point at 3100 (Point B) could offer support.

The other scenario is that it may come down further than its breakout point and test its 50 day moving average, a point used by the big institutions to load up on stock (Point C).

Leading stocks acted a little better than expected. A slightly higher number gained in above average volume compared to ones that fell in above average volume. On a market down day, that's a positive sign.

After yesterday's bearish reversal it looks like the Nasdaq may want to head south for a while, but so far its to early to tell how low it will go. Often an index will reverse but not continue downwards and instead move sideways - another scenario that my play out from here.

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Topics: Stock Market Summary