Thursday, October 13, 2011

Daily Market Commentary: Holds Yesterday Gains

It was a decent day for all indices. Honors went to the semiconductor index as it added another 2%, taking it very close to a second challenge of 381 resistance. Technicals aren't yet overbought while relative strength has shifted in favour of it over the Nasdaq 100. Both are good signs this rally has more in the bag.

($SOX)
via StockCharts.com

The Nasdaq 100 pulled away from its 200-day MA, marking a new closing high and taking out 2,320 resistance to boot. The index is nicely primed to mount a challenge of July (multiyear) high. Buying volume could be better but don't fight the trend.

($NDX)
via StockCharts.com

The S&P had a quiet day. It had a weak finish on Wednesday which extended into a poor start Thursday, but by the close of business it had made back the morning loss. However, it closed the day on resistance. Technicals have just entered overbought territory, but given the strength of the rally it could remain overbought for the next couple of days.

($SPX)
via StockCharts.com

Small Caps have underpeformed relative to the Nasdaq but yesterday's break of the 50-day MA was followed by a positive validation today. Technicals continue their improvement - but are not yet net bullish  - which suggests there is more upside to come here.

($RUT):

via StockCharts.com

For tomorrow, keep an eye on the Semiconductor index and Russell 2000. The former could see a test of 381 by the close of business, while the Russell 2000 has plenty of scope to mount a challenge of 731.

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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 Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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