Tuesday, February 02, 2010

Stock Market Commentary: Second Day of Gains

Second day of gains which were worth more to large caps than tech or small caps. For the S&P there was a close above the 1,100 as the S&P picked up relative strength against the Russell 2000 (large caps outperforming small caps). This may have left a substantial bear trap which could force a third day of big gains. However, even with two days of gains, stochastics of the S&P only just edged out of oversold conditions to give a 'buy'.


The Russell 2000 outlined some of the difficulties the indices face in the days ahead as intraday strength stalled out at the 50-day MA. On the plus side there was a CCI 'buy' signal.


Techs struggled even though it registered an accumulation day


For Wednesday keep an eye on large caps as the best chance for a short covering rally is in these indices (S&P and Dow) but it may be short-lived (morning?) if other indices don't participate.


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