Wednesday, February 01, 2012

Daily Market Commentary: Rally on Higher Volume Accumulation

Yesterday's tight action gave way to broader gains on higher volume. Tech and Small Cap indices enjoyed the best of the gains, helped by a very strong gain for the semiconductor index.

Gains in the Russell 2000 helped push supporting technicals back into firm overbought territory. Russell 2000 gains were enough to swing relative strength back Small Caps, although the long term relationship is in flux.


Nasdaq gains were not as great as for the Russell 2000, but the tight rising channel remains intact.


The semiconductor index was where most of the driving was done


Large Caps stayed in touch with gain in Small Caps and Tech indices, although there is a growing separation in relative strength between Large and Small Caps, to Small Caps - and bulls - favor.


While the rally chugs along the 20-day MA remains a good place to trail a stop or take advantage of pullbacks.  The only negative on the day was the inability to reverse the MACD 'sell' trigger in the S&P.

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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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