Daily Market Commentary: Bulls Have A Lash

Day Traders will have enjoyed today and there may be something for those who are looking to hold a little longer. Although it was one-way traffic throughout the day it's only one step of part of larger climb, a climb with many tricky sections to overcome.

The semiconductor index and the Russell 2000 were noted as the indices to watch for bulls and bears respectively and it was the bull-watch semiconductor index which came up trumps with a 5% gain (against the 3.7% for the Russell 2000). The gain was also enough to regain the 200-day MA. However, 20-day and 50-day MAs are close enough to add supply and may stall the advance tomorrow.

($SOX)

via StockCharts.com

The spillover from the semiconductor index was enough to leave a bear trap in the Nasdaq 100 and set up a rally to new channel resistance. Unlike the semiconductor index there is a price void up to the next supply level at converging 20-day, 50-day and 200-day MAs.

($NDX)

via StockCharts.com

The S&P also produced a bear trap on the rebound. But the rally kicked off before a test of channel support - a move to channel resistance is next with the 20-day MA to add some supply interest.

($SPX)

via StockCharts.com

But bulls still have concerns; the Nasdaq closed on breakdown resistance and the Russell 2000 failed to reverse its breakdown.

($RUT)

via StockCharts.com

The issue with today is large 1-day counter-trend moves rarely stick and a push back to the lows can't be excluded - but it does give bulls something to work with. Semiconductors remain the best option for bulls although knife catchers will likely get greedy with the Russell 2000.

Follow Me on Twitter

Build a Trading Strategy Business in Zignals



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!

Popular posts from this blog

S&P "Bull Trap"?

Image
I thought there was sufficient evidence to argue against a "bull trap" in the S&P, but it would appear the market wasn't interested in such thoughts and sellers were quick to reverse the initial push above 4,200.  Adding to the pain were new 'sell' triggers in MACD and On-Balance-Volume, although the former occurred above the 'bullish' zero line, making it a weak signal. Selling volume ranked as distribution as selling momentum picked up speed.  The index is also underperforming relative to the Russell 2000. 
Read more

"Black Candlesticks" are a concern for the S&P and Nasdaq

Image
A bright start for bulls on the back of positive $NVDA earnings wasn't enough to generate a day of meaningful gains.  However, it did help stall the losses of the last couple of days. The Nasdaq was the biggest beneficiary of today's action, but not enough to see an end-of-day finish that cleared last week's swing high, nor delivery of a large white candlestick, despite the morning breakout gap.  Technicals are net bullish and relative performance against the S&P has become consistently stronger since the start of May.  While today's candlestick I would view as typically 'bearish', today's volume ranked as confirmed accumulation (bullish). Overall, I would be looking for higher prices from here. 
Read more

Round 2 for the bearish "black" candlestick in S&P and Nasdaq

Image
The Nasdaq started brightly but ended up closing below its open price, but above yesterday's close. The S&P did something similar, although the intraday range is narrower. These two setups are somewhat complicated by the new 'buy' triggers in On-Balance-Volume for both the Nasdaq and S&P. And the new MACD trigger 'buy' for the S&P. Price action is key, so I would expect the candlestick to trump the technical picture; watch for lower prices tomorrow.
Read more

Archive

Show more