Wednesday, November 24, 2010

Daily Market Commentary: Festive Bounce

With the long Thanksgiving weekend ahead, markets signed off with a bit of festive cheer. Volume was, not surprisingly, light. But the gains achieved were enough to reverse yesterday's losses and then some.

The S&P actually managed to break declining resistance of the November decline. Bulls will use the 50-day MA as the initial trail until the 20-day MA is breached.

($SPX)

via StockCharts.com

The Nasdaq used the backtest of former resistance to springboard higher, taking it above the 20-day MA once more.

($COMPQ)

via StockCharts.com

The push in the Nasdaq was helped in large part by the breakout in the semiconductor index. The move above the November reaction high reversed technical weakness, creating a new MACD trigger 'buy'.

($SOX)

via StockCharts.com

While the Russell 2000 was able to regain the former channel, bringing to an end the initial breakdown. Will this instead evolve into sideways trading action?

($RUT)

via StockCharts.com

Friday's half-days worth of trading is unlikely to shed any light as to what lies ahead for December. The lack of volume disguised the true intentions of today's buying. But with 50-day MAs nearby there is a natural support level available from which buying risk can be assessed.

Enjoy the holiday and this blog will be back on Monday!

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