Stock Market Commentary: Short covering

Huge gains followed what looked to have been a shorts' play but the lack of volume suggested it was these same shorts who pressured the indices Friday who were now forced to cover today.


The lack of volume was telling, especially given the significance of some of the breakouts; namely the break of Nasdaq declining trendline and the push above the 50-day MAs for the Dow and Russell 2000. These will have significance over the coming days but they do suggest bulls are enjoying stronger fruits.



But the index to watch is the semiconductors; it is well clear of the 50-day MA and its 20-day MA will soon cross above the 50-day MA. Plenty of room to the 200-day MA too.


The end is closer than we may think.

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

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