Nasdaq and S&P 500 come under further pressure as yesterday's late fall hurts technicals

The markets got off to a strong start yesterday, but that's it. As the last hour of trading approached, they turned into something of a free fall.

The () was hit the hardest, leaving behind a very bearish inverted “hammer”. There are prior sell triggers in the MACD and On-Balance-Volume, as well as underperformance relative to the .

It's hard to envision a strong opening today, but if the bulls can hold on through Friday's close, it could ease the selling pressure on this index.

The is clinging to the support of the 20-day MA, but the pressure is increasing to the downside with a series of small upper peaks marking the points of attack for the bears. There has been a new sell trigger in On-Balance-Volume which is in addition to the previous sell trigger in the MACD. The best part of this situation is the strong bullish momentum, a momentum that has not weakened during the development of the “bull flag”.

The Nasdaq attempted a breakout yesterday, but found itself inside resistance yesterday – not enough for a “bull trap” – but enough to pause the upward move. The MACD oscillates between buy and sell triggers, but other technical indicators are positive. What I like is that the buy volume days far outweigh the sell volume days.

COMPQ-Daily Chart

I also monitor the. Tuesday was a solid bullish day, but yesterday was the opposite. The key moving average support is still there, but it now finds itself rapidly approaching ascending wedge support. The technical data is mixed, but the performance relative to is the one that causes the most concern.

SOX-Daily Chart

Also follow the weekly semiconductor chart. Here, things look more bearish on the technical side. An “ox trap” is in play, and “ox traps” generally return to consolidation support, support defined by the October 2022 and November 2023 lows.

SOX-Weekly Chart

The weakness at the end of the session suggests a weak start to the session tomorrow. Assuming a slow first half hour, expect buyers to step in and move the needle. If nothing happens around 10 a.m., it could be a tough day and the sales potential could extend into the last hour.

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