Tuesday, January 11, 2011

Daily Market Commentary: Positive Market Flow

It was again left to semiconductors to do all the running and this helped the Nasdaq and Nasdaq 100 close with gains.

The SOX posted another 1% gain on the back of a fresh MACD trigger 'buy' above the bullish zero line - a strong trending move. The 20-day MA has played as picture perfect support since the index cracked above its 200-day MA last October and is an excellent place below which to place a stop.

($SOX)

via StockCharts.com

For the Nasdaq, semiconductor strength has meant a rally which has ridden the rising channel line. The MACD has flatlined so the 'sell' is not really relevant as a signal (for now).

($COMPQ)

via StockCharts.com

Semiconductor strength has also kept the Nasdaq 100 just below its former rising channel (although I have illustrated a new, shallower channel). Technicals remain healthy, helped by the net strong gains over the past 12 months. It's the leading index at the moment.

($NDX)

via StockCharts.com

The other positive news came from the Russell 2000. It has struggled more at its 20-day MA but was able to finish above the moving average after tagging rising channel support. However, technically it's weaker than other averages and will likely be the first to break.

($RUT)

via StockCharts.com

The S&P was somewhat quiet, but held 1,260 support. There is a developing MACD and OBV 'sell' in the technicals, but with the index bissecting the rising channel it could be a while before we see a confirmed shift in the trend.

($SPX)

via StockCharts.com

The only worry of note was the expanded weakness in the Nasdaq Summation Index. The index undercut both 3-day and 5-day EMAs with a confirmed bearish divergence in the MACD trigger line and an earlier 'sell' in the CCI. Not a situation where you would want to be buying tech and perhaps a more prudent place to use strength to take profits.

($NASI)

via StockCharts.com

However, net market rally is still in play.

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