Tuesday, August 22, 2006

Commentary from Fallondpicks.com

Although I have been absent from watching the markets for the last few days, the overall picture hasn't changed enough to suggest bears have re-taken control. The NASDAQ channel breakout remains in play. The semiconductor index is well clear of its former channel and 50-day MA. For the large caps, 1,294 holds as support in the S&P and 11,324 in the Dow, both can be considered breakouts. The morning gap down in the NASDAQ 100 didn't generate a strong wave of selling, but near term support at 1,557 is looking vulnerable (day traders will probably find the most action in this level gives way). Short traders will have loaded up on the test of the 200-day MA in the Russell 2000 and bulls will probably let them have a few points before stepping up to the plate on the convergence of the 20-day and 50-day MAs. Volatility closed just below the 20-day MA and the point of its convergence with former triangle support - a low volatility period should play out from here, which usually favors bulls.

Technicals haven't changed from the bullish stance for the Markets [NASDAQ, NASDAQ 100, S&P, Dow and Russell 2000] and market internals [$NASI, $NAA50 and $BPCOMPQ]. Bulls should be good for another couple of months.

Click chart for link to stockchart.com




 
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