Saturday, July 13, 2013

Daily Market Commentary: Two Days of Gains

Technology caught up with Small Caps as the rubber band of relative strength swung back to the Nasdaq. However, the Russell 2000 didn't disappoint with its seventh straight day of gain. The index is just 14 points away from its measured move target.


It has also cleared its rising channel on the weekly timeframe.


The Nasdaq is fast approaching the measured move target of 3,680. The 20-day and 50-day MAs are about to 'Golden Cross' in what was an apparent whipsaw 'Death Cross'.


The big winner was the Semiconductor index as it negated the Bearish Engulfing pattern. The index is firing on all bullish cylinders, bringing with it a new measured move target of 520.


Strength in the Nasdaq was helped by new highs in Breadth metrics: Percentage of Nasdaq Stocks above 200-day MA and Bullish Percents. Plus, there was new swing high for the Percentage of Nasdaq Stocks above the 50-day MA. However,  the Nasdaq Summation Index stays on course to test highs.


While the S&P marked a new weekly closing high, re-engaging the rally.


Friday's close was enough to kick off the next phase on the rally on weekly time-frames. This will strengthen the trend on the daily timeframes, keeping long positions favoured with buys on pullbacks. There is little on offer for Shorts unless new breakouts 'bull trap'.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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