Tuesday, February 14, 2012

Daily Market Commentary: Late Recovery Keeps Bulls Happy

It was set up to be a down day for the markets before an 11th hour surge pushed the Nasdaq and Nasdaq 100 into positive territory and clawed back nearly all of Large Cap losses.  Only the Russell 2000 was somewhat immune to this buying.

The S&P didn't escape totally unscathed. While the index finished less than a couple of points lower, it was unable to prevent a MACD trigger 'sell' or see a confirmed distribution day (although this is really not as bad as it could have been given the small point loss).


The Nasdaq fared better.  Today's gain - while small too - registered as heavier volume as accumulation.  And unlike the S&P, retained its technical health.


If there is a skeleton in the closet it's the semiconductor index. Rising trendline support was broken a couple of days ago and while the 20-day MA was successfully defended it may contribute selling pressure to the Nasdaq.


But while the semiconductors may put the kibosh on the Nasdaq, it's the Russell 2000 which is in a trouble all of its own.  Rising support is hanging on, but any loss tomorrow is likely to see it broken.  Technical weakness continues to worsen.


For Wednesday, follow action in the Russell 2000. Should channel support breaks then it won't be long before the Nasdaq and S&P follow suit.

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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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