Monday, June 27, 2011

Daily Market Commentary: Bullish Recovery

The wild daily swings in the market continued as bulls made their stand following Friday's selloff. Monday's buying helped maintain March swing lows for the Nasdaq, Nasdaq 100 and S&P.

The S&P opened a few points above its 200-day MA and was able to rally back to its 20-day MA before sellers emerged late afternoon. The index is well poised to make further gains tomorrow.

($SPX)

via StockCharts.com

The Nasdaq made stronger inroads on Friday's selling and was able to finish above Friday's open price; the Nasdaq may be the index for bulls tomorrow. The 50-day MA at 2,763 is the next upside target.

($COMPQ)

via StockCharts.com

The Nasdaq Bullish Percents strengthened the swing low with a MACD 'buy' signal to follow the earlier CCI 'buy'. Improved technical strength was in combination with a crossover in the 3-day x 5-day EMA. Another factor favoring further highs for the Nasdaq tomorrow.

Nasdaq Composite Bullish Percent Index (EOD) ($BPCOMPQ)

via StockCharts.com

Small Caps are not to be ignored with 50-day MA and channel resistance the next upside targets for the index.


Tuesday will offer bulls the best chance to break out of the congestion of the past couple of weeks. Further gains will help convert 20-day MAs into support. A day of losses will only keep traders guessing for another day as to the eventual direction markets will take. Today's post on Quantifiable Edges suggests bulls will benefit in the coming days.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Zignals Trading Strategy Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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