Tuesday, July 13, 2010

Daily Market Commentary: Bear Channels Break For Large Caps

The tension of the past couple of days released to the upside which kept momentum with bulls. Volume was mixed which undermined the extent of the gains for some of the indices, but there was substantial technical improvement - particularly for large cap indices.

The S&P cracked above the declining channel and finished on the 50-day MA. Technicals are net bullish which was last achieved in February so it's a significant improvement on activity for recent months.

($SPX)

via StockCharts.com

The Dow was similarly impressive, going one step better to finish on its 200-day MA having started the day at its 50-day MA. With technicals net bullish and all key moving averages cleared it is the most bullish of the lead indices.

AAAAAAAAE Dow Jones Industrial Average ($INDU)

via StockCharts.com

The index to watch tomorrow is the Nasdaq; today finished at converged 200-day and 50-day MAs with a 'Death Cross' imminent. However, it also registered an accumulation day. Unlike large caps the Nasdaq remains trending inside its down channel.

($COMPQ)

via StockCharts.com

The Russell 2000 enjoyed the biggest one day gain, pushing through both 20-day and 200-day MAs. The 50-day MA is 9 points above and will be next resistance.

($RUT)

via StockCharts.com

The semiconductor index remains on course to test 377 as technicals turned net bullish.

($SOX)

via StockCharts.com

For tomorrow it will be important for large caps to hold their bear channel breakouts and for the Nasdaq to push through converged 50-day and 200-day MAs.

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