MARKET COMMENTARY

It was a flat market on Tuesday. I expect the market to be volatile in the next few days due to a lack of long-term, high impact news that can change the market. Most of the dismal financial news had been factored in the market. Hence, we may not see major move until something new crops up. But, we may see some sensitivity in the market to news that is minor in nature as more people are trying to look for fresh input to help them in trading. Therefore, a small change in the oil price, for example, may jolt the market from time to time but it quickly changes direction when other market updates roll in. This is the kind of things we usually see in a trading range situation.

It was a non-event for Dow; in fact, for all other indexes as well. I call it the ‘second-day inertia’ which is a common phenomenon when there was a strong market move the day before. Usually, it is a continuous pattern which means the Dow should go further down from here on the third day. While this is true most of the time, it may behave differently this time due to the sideways pattern we have currently. Let’s see what happen next. Yes, it is not easy to trade at this time.

DJIA Daily Chart

The Russell is finding immediate support here but it may break anytime. A stronger support is at 710. Therefore, Russell may drop further to around 710 before the next critical move.

RUT Daily Chart

The Nasdaq had hit the support. Now, the next move will be the deciding factor in determining the next likely trend. At this time, the Nasdaq is still a bullish chart.

NDX Daily Chart

STOCKS TO WATCH:

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