Sunday, June 18, 2006

Fallondpicks.com: Weekend commentary

Newsletter, Members Click HereMy next post won't be until Thursday as I am attending/presenting at a conference on Kauai. It was a relatively good end of week for bulls; in net terms it started more or less as it finished, but there was a whole lot of excitement along the way. Friday's higher volume reflected options expiration and although moving average resistance (20- and 200-day) held in all indices, there was little in the way of concerted selling to push markets back to Thursday's lows. The Russell 2000 gave up the most on the day, but even this index failed to retrace more than half of Friday's gains.

Technically, the semiconductor index enjoyed a MACD 'buy' trigger, as did the NASDAQ 100. All indices support bullish divergences in their MACD histograms - the first such pattern since the decline started in late April. There is still a bearish alignment between the indices with large caps leading tech markets leading small caps and this will need to change if a sustainable rally is to develop.

I would not be surprised to see this action repeat for the early part of next week as market participants figure out who is in the ascendancy. Based on the relative position of the secondary tech indicators [$NASI, $NAA50 and $BPCOMPQ] it is bulls who have the advantage.
 
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