Monday, June 18, 2012

Daily Market Commentary: Breakouts Hold

As Greek election results passed into history it was left to buyers to continue Friday's breakouts. Both Tech and Large Caps enjoyed a solid day with Tech perhaps edging the action on the day.  Buying volume was well below Friday's which marked Monday as a consolidation rather than a follow through.

In addition to the channel break there was a bullish cross for the Directional Movement Index and On-Balance-Volume.


Last week the Nasdaq 100 cleared channel resistance and posted a secondary breakout (the Nasdaq did likewise). There was also bullish crosses for On-Balance-Volume and Directional Movement Indicator.


The S&P was more subdued on the day. It started the day closest to its 50-day MA and therefore best positioned to put itself into clear air, but by the close of business it remained contained by moving average resistance.


The Russell 2000 continued to struggle despite finishing higher. More worrying, there is an increase in relative strength loss to the Nasdaq. Without Small Cap participation it will be hard for this rally to maintain its momentum.


The key watch for this week will be a higher volume follow through.  For tomorrow, look for indices to hold their breakouts, preferably followed with a few low key days to prime the next move.

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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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