Friday, December 17, 2010

Daily Market Commentary: Bulls Undo Bears Work

The one days worth of selling generated by bears was today negated by the buying action of bulls. Volume was comparable to that of yesterday, fitting a case of tit-for-tat between the two sides. The gains have put new yearly highs on the radar and with supporting technicals net bullish for all leading indices, there is little to suggest they won't make it there.

The S&P was able to close above yesterday's open and is just under 4 points away from a new high.

($SPX)

via StockCharts.com

The Nasdaq rallied before it got anywhere close to testing either 2,579 support or its 20-day MA. Ordinarily, this would be bullish - but the lack of volume is a concern, especially when volume is compared to that from September through November.

($COMPQ)

via StockCharts.com

Nasdaq breadth was a little mixed. The Percentage of Nasdaq Stocks Above the 50-day MA saw increased bearish technical weakness but the indicator found support at the November double bottom neckline.

($NAA50R)

via StockCharts.com

Meanwhile the Nasdaq Summation Index completed its bullish turn and is technically net bullish.

($NASI)

via StockCharts.com
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There was a slight technical bear creep in the Russell 2000 with a 'sell' in the CCI - this despite today's gain. A couple more days of gains would negate the slight bearishness, although developing negative divergences are a concern.

($RUT)

via StockCharts.com

The same was true for the semiconductor index. The early 'sell' in the CCI was followed with one for the MACD. But the index has yet to test either its 20-day MA or rising channel support, although increasing technical weakness suggest this will happen sooner rather than later.

($SOX)

via StockCharts.com

For Friday, look for some follow through to the upside, but don't expect volume to be setting the world alight. The Melt-Up should run for another day...

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