Daily Market Commentary: Relief Bounce in Effect
Not surprising to see markets recover after Friday's heavy selling. The S&P low of 1183.68 was a picture perfect 20-day MA test but Friday's close ranked as a breakdown (from the perspective of candlestick real-bodies - but not full intraday ranges), so the bounce is working against resistance, not support as before. The MACD switched to a 'sell' but it has been whipsawing the past few weeks so it's not a strong signal.
($SPX)
The Dow actually broke channel support on April 7th and marked a successful backtest on April 14th. Monday made substantial inroads to Friday but the rate of ascent from February lows has slowed. It too closed with a MACD trigger 'sell'.
($INDU)
Tech averages clinged to channel support with the breakout gaps closed (true breakout gaps never close). But the recovery off the lows may see some follow through up over the coming days given the successful defense of support.
($COMPQ)
The same was true of small caps, although the defense of support was marred by a CCI 'sell' trigger
($RUT)
So look for today's gains to follow through tomorrow morning and perhaps for the next 2-3 days. But it's going to be much harder for new highs to be reclaimed given the extent of Friday's selling volume. Shorts will be feeling confident.
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($SPX)
via StockCharts.com
The Dow actually broke channel support on April 7th and marked a successful backtest on April 14th. Monday made substantial inroads to Friday but the rate of ascent from February lows has slowed. It too closed with a MACD trigger 'sell'.
($INDU)
via StockCharts.com
Tech averages clinged to channel support with the breakout gaps closed (true breakout gaps never close). But the recovery off the lows may see some follow through up over the coming days given the successful defense of support.
($COMPQ)
via StockCharts.com
The same was true of small caps, although the defense of support was marred by a CCI 'sell' trigger
($RUT)
via StockCharts.com
So look for today's gains to follow through tomorrow morning and perhaps for the next 2-3 days. But it's going to be much harder for new highs to be reclaimed given the extent of Friday's selling volume. Shorts will be feeling confident.
Follow Me on Twitter
Build a Trading Strategy in Zignals; Read how and earn real money (once out of Beta) in this PDF.
Dr. Declan Fallon, Senior Market Technician for Zignals.com, offers a range of stock trading strategies for global markets, also available through the latest rich internet application for finance, the Zignals MarketPortal or the Zignals Trading Strategy MarketPlace.
Zignals offers a full suite of financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock list watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own trading system and sell your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com.
JOIN US TODAY - IT'S FREE!
