Tuesday, January 29, 2013

Daily Market Commentary: New Highs for S&P

When I wrote at the weekend I thought we had seen our market top (at least for the S&P), but today's action surpassed it with the week not half way done. The new high doesn't change the heavily overbought nature of the rally, but what goes high can go higher.

Despite the new high in the S&P, the relative shift from Large Caps to Small Caps continues.



The Nasdaq was more subdued, but buying momentum is building, as marked by improving On-Balance-Volume.


However, it's clear the components of the Nasdaq are up against a wall with the percentage of Nasdaq Stocks above the 50-day MA stuck around the 80% mark, with technicals already showing 'sell' signals.


While the semiconductor index has the makings of a bearish 'Shooting Star'.


The Russell 2000 was also relatively quiet, with today's action trading inside yesterday's range.  However, the index continues to enjoy a relative advantage over both the Nasdaq and the S&P.


While the S&P is overbought in the short term, it hasn't reached the 10% above the 200-day MA which is frequently associated with swing highs.  This point will be reached at 1,537, which at current rates is still 3 or 4 days away (assuming no declines!).

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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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