Thursday, February 23, 2012

Daily Market Commentary: Modest Accumulation

Small gains on a slight uptick in volume helped bulls defend support.  Both the Nasdaq and Nasdaq 100 maintained their advance within the boundaries of their channels  The S&P edged higher, undoing yesterday's losses. While the semiconductor and Russell 2000 dug in at their respective 20-day MAs, but neither could undo the earlier trendline breaks.

There was a swing towards Small Caps from Large Caps; although there is a broader shift to Large Cap stocks dating back to the start of February.


The Nasdaq added almost a 1%, but the gain wasn't enough to reverse the MACD trigger 'sell' for the index.


While the semiconductor index recovered from an intraday loss of its 20-day MA to finish the day just above it. However, technical weakness continues to expand, so it's likely this defense of the 20-day MA won't build into a lasting rally.


The Russell 2000 posted the largest one-day gain.  The index is developing a sideways consolidation with clear support/resistance.  This consolidation should break higher given the direction of the feeder trend; stops can go below support.


For tomorrow, look to Small Caps for leads.  A move past 833 resistance might be enough to pull the other indices with it.

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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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