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Earlier gains couldn't hold

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This morning's higher open for stocks has been erased as the major market averages and bulk of sectors now trade in the red. Only the HMO Index (HMO.X) 516.76 +0.27% and the Forest Paper Products (FPP.X) 358.61 +0.25% currently show gains.

The tech heavy NASDAQ Composite (COMPX) 1,787 -0.93% is beginning to violate its past support level near 1,816 on a more noticeable basis today and has investors assess upward trend at current level and then the 1,741 level of retracement from here. The rolling 200-day MA and 50-day MA certainly look to have been a major factor that acted like resistance on every rally attempt in March.

NASDAQ Composite Index Chart - Daily Interval

Technicals for the NASDAQ Composite (COMPX) are looking weak. Bulls will try and defend the upward trend that is currently in play. The bulls might just be able to do that today as I'm not seeing a rush back into Treasuries, which would signal a more "defensive" type of market posture.

The shorter-term 5-year YIELD ($FVX.X) is seeing the most meaningful buying today as YIELD there drops to 4.694%, but the benchmark 10-year YIELD ($TNX.X) is down just fractionally at 5.31%. The greater amount of buying in the 5-year does hint at a defensive posture as the 5-year YIELD is considered "less risky" than the 10-year. It's when we see "blanket buying" among all maturities that usually signals a much more defensive market environment.

Adelphia recovers from new 52-week low

Shares of Adelphia Communications (NASDAQ:ADLAC) $11.23 -5% have rebounded from their lowest levels of the session ($9.52) after rumor that a "Texas family" investment firm may step in to take a stake in ADLAC. There has been no confirmation of this "rumor," but the stocks rebound from the lows does look to be having an impact on the stocks "recovery."

Jeff Bailey
Senior Market Technician
Option Investor

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