Sunday, September 21, 2014

Daily Market Commentary: Higher Volume Selling, and Bearish Engulfing Pattern in Russell 2000 and Semiconductor Index

In day when Alibaba took the headlines, it was left to the Russell 2000 and Semiconductor Index to warn of potential change.

The Russell 2000 experienced a large bearish engulfing pattern, although within the boundaries of the declining channel. There was an undercut of the 200-day MA, which will need to be watched on Monday. Shorts could get aggressive with a stop above 1,164 (and/or declining channel line).

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Thursday, September 18, 2014

Daily Market Commentary: Accumulation

Bulls had another good day; a third good day in a row.  The Dow capped the day with a breakout into what could turn a larger measured move higher. Volume rose in accumulation, and residual bearish technicals were negated on the move higher.

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Wednesday, September 17, 2014

Daily Market Commentary: Semiconductors Advance

It was a roller coaster day, but the Semiconductor Index was the one to finish with an edge to the bulls. It looks like a break of 652 will happen sooner rather than later, with the swing low at 631 a handy place to mark risk (for a stop).

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Tuesday, September 16, 2014

Daily Market Commentary: Breakouts and Bullish Reversals

The bullish reaction was swift and strong.  Shorts who took advantage of the break of support were quickly put on the back foot.

The S&P regained 1,987 support and delivered a breakout of the declining channel. Technicals will take a few days to recover, but relative strength took a sharp swing in Large Caps favour.

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Monday, September 15, 2014

Daily Market Commentary: Small Caps Take Another Hit

Headlines may have suggested otherwise for markets, but Small Caps had a rough day. The Russell 2000 lost over 1% in a slice through both 50-day and 200-day MAs. It's ugly because Small Caps have to re-establish a new price channel and each daily loss makes this new channel less and less bullish. Technicals are not net bearish, but they are not looking good either.

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Sunday, September 14, 2014

Daily Market Commentary: Distribution Returns

It was a second day of heavier volume selling in four for the S&P, and the fifth day of distribution since the last accumulation day. The breakout of 1,987 was undercut by Friday's close in addition to a finish below the 20-day MA. Bulls still have room for maneuver with the 50-day MA next in line for a test; even a modest rally Monday would be enough to return the S&P above its breakout.  The higher volume selling is a concern, but not a deal breaker for bulls...yet.

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Thursday, September 11, 2014

Daily Market Commentary: Strong Day for Russell 2000

It was a modest day for the S&P, Dow and Nasdaq indices, but it was a better day for the Russell 2000. The recovery in the Russell 2000 after the channel breakdown took a big step forward as it worked itself off its 50-day MA and finished above its 20-day MA. The breakdown remains, but this will likely shape itself into a broader (more shallow, and therefore more sustainable) rally.

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