Friday, July 08, 2011

Daily Market Commentary: Higher Volume Accumulation

Thursday saw some half decent buying volume, although it was well off a typical accumulation day. Better were the breakout gaps with the Nasdaq and Nasdaq 100. The latter index finished just shy of a new closing high for 2011.

The S&P cleared 1,343 which was the marker level for a bearish head-and-shoulder reversal. Shorts who were looking to benefit were caught with their pants down. Next challenge is to negate the May bull trap.

($SPX)

via StockCharts.com

The Nasdaq enjoyed a powerful gap open, and more importantly was able to retain those gains over the course of the day. It too is looking to negate its bull trap.

($COMPQ)

via StockCharts.com

The sister Nasdaq 100 enjoyed the best of Tech action and has almost made a new closing high for 2011. When it does it will have negated the May bull trap and will have sent a very positive signal to other lead indices.

($NDX)

via StockCharts.com

The semiconductor index was able to benefit, reversing what had been two days of losses, but not doing enough to break above its 50-day MA. This could still play out as resistance tomorrow.

($SOX)

via StockCharts.com

Finally, the Russell 2000 posted the largest gain on the day, taking it up to what may yet (ironically) be potential head-and-shoulder reversal. But technicals are healthy and momentum is definitely with bulls. It would take an unlikely loss to go back to - and below - 773.

($RUT)

via StockCharts.com

For tomorrow, it would be a stretch to expect another days worth of gains, but a repeat of low volume, narrow trading would be welcome.

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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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