Monday, February 27, 2012

Daily Market Commentary: Bulls Maintain Pressure

Markets finished strong after a weak start. Volume rose to register an accumulation day, although overall volume was not particularly heavy. The rally keeps chugging along.

The S&P continued to make relative strength gains against the Russell 2000. This is good news for defensive Large Caps, but it may be a growing worry for Small Caps. It's a modest shift and not enough to turn the broader trend in favour of safe sector Large Cap stocks, but should this continue it could signal the end of the broader rally.


In morning trading the Nasdaq was trading outside of its channel, but afternoon buying was able to bring the index back inside its channel. The MACD trigger 'sell' remains in play.  With the index trading inside its channel (and at channel support) the favored outcome is for higher prices.


The Russell 2000 finished down slightly, but the index is range bound in a sideways channel. No reason to get excited, although the range bound trading means relative strength is angling away from Small Caps to Large Caps and Techs.


Another day - another gain. Tomorrow is set up to offer more of the same.


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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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