Thursday, November 01, 2012

Daily Market Commentary: Accumulation

As NY got to grips with the after effects of Hurricane Sandy, the market managed to add its 2 cents too.  Buyers were quick to snap up stocks, particularly those of harder hit technology indices.

The Nasdaq has so far mounted a text book defense of its 200-day MA.  Bulls jumped in with some gusto, but its next challenge is perhaps just a day away - the 20-day MA. Technicals held their bearish tone, but On-Balance-Volume may see a bullish cross tomorrow.


The leg work was done by the semiconductor index.  It gained over 4% on the day, finishing above its 20-day MA.  However, it continues to trade below its 200-day MA.


Small Caps were able to go a step further.  While it didn't enjoy as much of a gain as did the Russell 2000, it was able to close above its 20-day MA; good news for Nasdaq watchers.


The biggest volume gain went with the Dow.  Buyers have so far jumped the gun a little, with accumulation occurring before the 200-day MA was tested.


Tomorrow has an opportunity for more of the same, especially given the close above the 20-day MA in the Russell 2000 and the possibility for the same in the Nasdaq; supported by strength in the semiconductor index.

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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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