Monday, April 05, 2010

Stock Market Commentary: Positive Jobs Positive Response

The reaction to good news was swift but volume was very disappointing given the significance of the price gains. The action had the characteristics of short covering but while volume was on the downside there were some important technical changes.

For the S&P the MACD trigger 'sell' was negated as on-balance-volume nicked a new reaction high. Relative strength swung back towards Small Caps - a bullish development. The support channel line held firm and the bearish implications of the spinning top was negated.


The gains in the Nasdaq did not change the bearish technical picture and the shooting star is still in play


The best returns came from Small Caps with a fresh breakout (691 new support). The 'sell' trigger in the CCI reversed but not the one for the MACD. Watch for a false breakout.


The other strong performer was the semiconductor index. Both MACD and CCI 'sell' triggers were negated.

Without buying volume Monday's gains carry a level of skepticism. However, recent congestion has been cleared and there is room to the upside as per my weekly commentary.

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