Thursday, August 23, 2012

Daily Market Commentary: Buyers Attempt a Stand

Not sure buyers are coming in a little early on this? But after Tuesday's sharp intraday reversal it had looked likely markets were going to take a little breather.  Instead, bulls took markets off their lows and back to Tuesday's close - or slightly higher.  Volume was lighter, so there wasn't a whole lot of conviction to the buying.

The Nasdaq had the best of the buying, keeping the July rally on track towards testing channel resistance.  Technical strength remains good.


The Russell 2000 was the day's underperformer.  It closed lower, but had managed to claw back some of the day's losses.  It remains primed to break past the June swing high (long ago breached for the S&P and Nasdaq) and has plenty of support to look too at 795, 20-day and 50-day MAs.


The S&P was effectively caught in the middle.  Closing on a doji and in a position where it could go either way.  Tuesday's high effectively touched channel resistance, so the scales area tipped slightly in favour of bears - perhaps enough to see a test of the 20-day MA currently at 1,397.


Futures point to a higher open, but this may be faded as I would suggest bears have the slight edge to at least push markets lower for another couple of days. Bulls are best placed to stick with Technology sectors/indices as upside momentum is very much with them.

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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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