Monday, March 11, 2013

Daily Market Commentary: Seventh Day of Gains In A Row

The market added yet another accumulation day as part of seven straight day of gains.  The Russell 2000 maintained its relative leadership roll, despite the smallest of gains today. With Small Caps leading, the potential for this rally to continue remains high.


Indices were left at channel resistance, which offers an opportunity for the rallies to consolidate their gains as part of a broader advance.

The S&P and Nasdaq may track the upper channel as they have in the past.  Both are in good technical shape.


However, the headline stealing Dow Jones hasn't reached a natural resistance level.  It could keep stealing the headlines for another few days.


The other point of interest is the breakout in the semiconductor index. If the breakout holds it will help support the rally in the Nasdaq.


Finally, the volatility index reached its lowest value in years. But this is not necessarily a reason to mark an immediate top: In 2005, the last low in volatility index, was separated by over 6 months from the next major peak in the markets. This could be a slow burn...


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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. You can read what others are saying about Zignals on Investimonials.com.

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