Monday, July 19, 2010

Daily Market Commentary: Modest Recovery

No surprise to see modest gains following Friday's sell off. Volume was light which reflected the lack of true conviction on the part of buyers.

For the S&P it has been a strange past couple of weeks. The S&P shifted from a bear trap to a bull trap as the rate of descent from April's high slows. I have redrawn a new channel which reflects this new rate of loss.

($SPX)

via StockCharts.com

But the Nasdaq has not shifted course and remains in its dominant downtrend.

($COMPQ)

via StockCharts.com

Small Caps are struggling inside a narrow channel and below all key moving averages. Relative strength has swung sharply away from the Nasdaq and S&P - a distinctly bearish scenario.

($RUT)

via StockCharts.com

With the new channels in place it's now a matter of tracking their relevance to the existing trend.

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