Monday, June 01, 2009

Stock Market Commentary: Breakouts Galore

The hotter than usual bank holiday in Ireland looks to have spread to NY with a swathe of bullish breakouts supported by upturns in technicals. It's hard to be a buyer in this environment but for those that have it was a great Monday. The Nasdaq sliced through 1,785 on a fresh MACD trigger 'buy' and bullish cross in on-balance-volume which was enough to return all technicals to net positive.


Semiconductors again were there to lend a hand as some creeping bearishness was blown away. Bullish Action in the semiconductors has very much fit the bill for a significant market bottom - it's just hard to shake the feeling (especially when you consider cycle analysis) that the bottom has come and gone. But it's a welcome relief all the same.


Small caps came to the fore as market relative strength show Small Caps as top dog {Small caps > Tech > Large Caps}. The Russell 2000 finished above its 200-day MA on a MACD trigger 'buy'. Not to mention the breakout of 515 resistance.


Even the S&P was able to crack above its 200-day MA on higher volume. Not to mention the MACD trigger 'buy' and on-balance-volume bullish cross.


The good news is that the breakouts introduce new clear support; should these break they will create bull traps and it could be a sharp down from there. But bulls have it for now.

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

 
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