Thursday, July 21, 2011

Daily Market Commentary: Heavy Volume Gains

The perfect follow through to Tuesday's buying (and yesterday's tight trading). Trading volume was comparable to that of the June bottom. Friday will look for another consolidation now resistance is more of a factor (for certain indices).

The S&P finished on 1,343 resistance which marked the line in the sand for the May and July bull traps. Technicals remain net bullish.  The recent 'Golden Cross' lends support for a continuation of the intermediate term rally.

($SPX)
via StockCharts.com

The Nasdaq did not enjoy as strong buying Thursday, although it had already reached bull trap resistance on Tuesday's trading. Like the S&P, technicals are net bullish and a 'Golden Cross' is in play.

($COMPQ)
via StockCharts.com

The index to watch is the Nasdaq 100. It has no 'bull trap' to negate, just old fashioned resistance. A break here will help other indices do likewise - the Nasdaq in particular.

($NDX)
via StockCharts.com

The other index which will benefit from Nasdaq 100 strength is the semiconductor index. The Philadelphia semiconductor index successfully back tested its bear trap and is well positioned to challenge its first level of resistance at its 20-day MA.

($SOX)
via StockCharts.com

For tomorrow it may be best to watch the Nasdaq 100 for leads, but actually trade the semiconductor index (SMH).

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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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