Daily Market Commentary: Buying to Fill Gap?
Buyers did well to step in and push the market higher after a weak Monday close. Volume climbed to register an accumulation day, although buying volume is below recent selling volume. There looks to be a drive to close the breakdown gap from last Thursday, so look for follow through upside in morning trading. What happens when these gaps close and/or 20-day MAs come into range remains to be seen.
It was good to see Small Caps and Tech doing most of the front running. The Russell 2000 gained almost 5% on the day, but is still a long way from June lows (90 points away).
Russell 2000 Small Cap Index ($RUT)
via StockCharts.com
The Nasdaq isn't as far removed from the June low as the Russell 2000, but technicals remain weak. Watch for selling action at the 20-day MA, this may represent an either/or both combination of profit taking and new short sales (or bulls who purchased last week and are looking to get out).
($COMPQ)
via StockCharts.com
The S&P did not improve much technically, but Tuesday's rally offers hope for buyers that something better is on the way. Look for resistance at the 20-day MA
($SPX)
via StockCharts.com
With stronger leg work coming from bull market sensitive sector like growth and tech stocks there is a good chance markets will confirm double bottoms - a close above last week's swing high is essential. But for tomorrow, it may just be case of keeping the powder keg dry and holding on to today's gains.
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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Zignals Trading Strategy Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.
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It was good to see Small Caps and Tech doing most of the front running. The Russell 2000 gained almost 5% on the day, but is still a long way from June lows (90 points away).
Russell 2000 Small Cap Index ($RUT)
via StockCharts.com
The Nasdaq isn't as far removed from the June low as the Russell 2000, but technicals remain weak. Watch for selling action at the 20-day MA, this may represent an either/or both combination of profit taking and new short sales (or bulls who purchased last week and are looking to get out).
($COMPQ)
via StockCharts.com
The S&P did not improve much technically, but Tuesday's rally offers hope for buyers that something better is on the way. Look for resistance at the 20-day MA
($SPX)
via StockCharts.com
With stronger leg work coming from bull market sensitive sector like growth and tech stocks there is a good chance markets will confirm double bottoms - a close above last week's swing high is essential. But for tomorrow, it may just be case of keeping the powder keg dry and holding on to today's gains.
----------------------
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!
