Thursday, November 18, 2010

Daily Market Commentary: Bounce and Run

Yesterday's tension coiled in market's doji unwound higher with 50-day MAs providing the impetus for the drive.

The S&P posted an accumulation day but closed the day against short term resistance and the 20-day MA. Bulls will have enjoyed today but tomorrow is the bigger test.

($SPX)

via StockCharts.com

The Nasdaq, like the S&P, is toying with declining resistance and its 20-day MA. Tomorrow's challenges are the same.

($COMPQ)

via StockCharts.com

The Russell 2000 took the recovery bounce a step further by making it all the way to the August-November channel, former-support-turned-resistance. It did enough to push beyond the 20-day MA but if morning losses were to build it could see shorts jump on the wagon.

($RUT)

via StockCharts.com

The semiconductor index has gone from a bull trap to a potential bear trap - although it's not entirely convincing. However, it has managed to defend its 20-day MA.

($SOX)

via StockCharts.com

Today's gain was not entirely convincing and the drop from the highs is perhaps short a couple more weeks of downside to mark a bottom. But for now, bulls are willing to defend 20-day / 50-day MAs.

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