Tuesday, June 14, 2011

Daily Market Commentary: Recovery Bounce Begins

A second attempt at a swing low kicked off with respectable gains on modestly higher volume across lead markets.

The S&P rallied back to the gains posted last Thursday. The three day sequence completed a 'bullish morning star' which leaves it poised for further gains. Unfortunately, there are a number of supply levels to overcome, first of which is 1,294, then 1,305, followed by the 20-day MA.


The semiconductor index managed to test its 200-day MA but lost some of its gain by the close of business. Work to do but bullish divergence in CCI remains. First step remains a push above its 200-day MA before other resistance levels can be considered.


The Nasdaq gapped higher on lighter volume. The gain was enough to confirm a defense of the 200-day MA but minor resistance can be found at the April swing low at 2,706.


Finally, the Russell 2000 enjoyed the largest gain. Small Caps jumped over 2% as it worked off converged support. Relative strength swung to outperform Tech stocks, but not Large Caps - which remain the market leaders.


Tomorrow will offer a truer indication of today's buying strength. If markets are to close lower it will be important there is a close in the upper third of Tuesday's price range. Anything more and money will likely remain on the sidelines, keeping a lid on any potential for a sustained rally.

Follow Me on Twitter

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.

Zignals offers a full suite of FREE financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own trading system and sell your trading strategy in our MarketPlace to earn real cash.

You can read what others are saying about Zignals on Investimonials.com.

JOIN US TODAY - IT'S FREE!

 
f9229fcfd1b1390be00cfccc86c90349c93a4179bf4227457c