Tuesday, October 11, 2011

Daily Market Commentary: Tight Trading

It was a quiet day in point terms but taking a peak under the lid revealed a far more bullish day. The first point of note was how indices were able to hold all of yesterday's gain and even add a little (for the Nasdaq 100, Nasdaq and Russell 2000).

The quietest indices were Large Caps. The S&P barely added a point, but technicals continued to advance higher - there is still plenty of room for these to gain.

($SPX)
via StockCharts.com

The Nasdaq finished the day net bullish with a slight uptick in volume (net accumulation?). The index remains on course to test 2,616 resistance.

($COMPQ)
via StockCharts.com

Strength in the Nasdaq was reflected in the Bullish Percents. Here technicals of the breadth indicator are net bullish with powerful bullish divergences in the CCI and MACD.

($BPCOMPQ)
via StockCharts.com

The Nasdaq 100 got as far as its 200-day MA as technicals rolled net positive. This index remains the one most likely to challenge July highs.

($NDX)
via StockCharts.com

While the Russell 2000 was able to finish on its 50-day MA, although the moving average remains a potential point of resistance.

($RUT)
via StockCharts.com

For tomorrow, look for the week long rally to consolidate before continuing higher. The Nasdaq 100 is the index to watch for leadership moves. If the Nasdaq 100 can push past the 200-day MA and the Russell 2000 its 50-day MA then it will help drag the Nasdaq and S&P 500 higher; the former towards 2,616 and the latter 1,260. These remain the goals for the current rally.

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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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