Daily Market Commentary: Small Caps Under Pressure

A near 1% loss for the day dropped the Russell 2000 back to support marked by the October swing high. Also here is the 20-day MA, another point to work as support. More worrying was the close near the low of the day, suggesting further losses are likely.

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Market Sentiment: Inter-Sector Breadth Analysis

Updated the last three days of action into the sectorbreadth chart.

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Daily Market Commentary: Modest Gains

The good news is that Friday's gains held up. The bad news, is little more was added to those gains.

Today's highs in the S&P didn't take out the all-time high, but there was a relative swing in favour of Large Caps over Small Caps.

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Daily Market Commentary: Santa is Pulling Hard

It was a valiant attempt by bulls to arrest the declines in Large Cap indices. It probably did enough to scare off shorts looking to attack Thursday's sell off, but volume wasn't exactly supporting the % gain.

The S&P was able to stick its nose back above the channel line and regain its 20-day MA in the process. It's a mini-'bear trap' for those who may have shorted the cut below the 20-day MA (which pushed the index back inside its channel).  Technicals split bullish/bearish, although Friday's price action hands the ball back to the bulls.

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Daily Market Commentary: Large Caps Wobble

It has become a little more difficult for Large Caps following Thursday's losses. The November channel breakouts have now failed for both the Dow and the S&P, with the next move likely to be a challenge of the November swing low/50-day MA in the S&P, and 50-day MA for the Dow.  Short plays in these indices can use a close above the 20-day MA as a cover.

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Daily Market Commentary: Volatility and Volume Increases

It was to be expected at some point after the holidays, volatility would increase.  However, Tech averages had a relatively quiet day, although the semiconductor index had a wobble of its own.

For the S&P (and Dow), the increase in volatility left the index flat by the close. The index finished on former upper channel resistance-turned-support, with the 20-day MA also seeing a positive test. However, technicals weakened further with 'sell' triggers in On-Balance-Volume and +DI/-DI, with volume picking up to register a confirmed distribution day.  Short term is set up for a bounce, but if this bounce doesn't reverse the technical 'sells', then a larger decline is likely. A close below the 20-day MA today or tomorrow would kill the short term bounce too I think, perhaps bringing in a larger test of the 50-day MA.

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Market Sentiment: Inter-Sector Breadth Analysis

Finally put together my sector breadth analysis to include change over time (Looks to only work in Chrome - Timing Out in Explorer and Firefox - cross domain issue?). Google's bubble chart working very nicely and there are lots of customisation options, including tabbed histograms.  Last 10-days with Bullishness, Sector Rank, Price Change and Price to choose from.  You can also track the trails:


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Market Sentiment: Sectorbreadth

Split sector performance: Defensive sectors gain, Cyclical ones lose out. Utilities ($XLU) on the rebound. 

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Daily Market Commentary: Conflicting Day

It was a case of selling for many of the indices, with the exception of the semiconductor index.  The semiconductor index has been a long time underperformer, but today it held on to its breakout with a modest gain. Technicals are also in good shape.  If there was a marker as to where to place your bets for a Christmas rally, Tech would look to be the place to be.

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Market Sentiment: Sector Breadth.

Utilities remains on its own. Other sectors still clustered, although weakening slightly from last week. Buying opportunity exists when sector drops below 10% bullishness - Utilities at 15% currently.

Minor ranking changes don't point to any potential trend shift.

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Daily Market Commentary: Big Loss in Russell 2000

Trading volume was not particularly excessive as traders slowly crawl back to their trading desks after the holidays. However, what action there was sided with bears.

The small cap, Russell 2000, took the largest hit on the day, down over 1%. However, losses remained confined to the larger bull trend, so the real damage was relatively light.

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