Daily Market Commentary: Bulls Defend Lows Despite Rumors
A scary start for the markets on Friday was quickly reversed, but buyers were prepared to defend the lows of late August/September which is good news for those looking for further upside. Volume climbed to register an accumulation day, although there are still resistance levels to overcome.
The S&P closed just above its 20-day MA, but below its 50-day MA. Buyers were able to take the market all the way to its 50-day MA - but not beyond.
The Nasdaq is looking well placed to clear 3,700 resistance which will be significant for the broader market. There is already a marked acceleration in the relative performance of the Nasdaq against the S&P since the end of July - the Nasdaq is the path of least resistance for longs.
Assuming the Nasdaq clears 3,700, it will do so from a 'neutral' position in breadth metrics. That is, we are not looking at a particularly good buy-and-hold signal, but we are looking at something which could give a solid % return as stocks will not have had a chance to sell off to a point where fear could become an issue.
Although the Nasdaq Summation Index is on the verge of giving a nice 'buy' signal (ideally, I like to see this around -800 for a strong buy; but it would take another 2-3 months of declines from here and I don't see this happening at the moment).
The Russell 2000 is the only index caught in a bit of a bind. Channel support looks good and 1,000 will be key psychological support. However, the 'Death Cross' between 20-day and 50-day MAs has so far proven enough to contain things. I think it will break higher today, but wait for this to happen before going long.
Futures are pointing to a higher open, so it could be a solid day for the bulls if indices start above resistance MAs.
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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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The S&P closed just above its 20-day MA, but below its 50-day MA. Buyers were able to take the market all the way to its 50-day MA - but not beyond.
The Nasdaq is looking well placed to clear 3,700 resistance which will be significant for the broader market. There is already a marked acceleration in the relative performance of the Nasdaq against the S&P since the end of July - the Nasdaq is the path of least resistance for longs.
Assuming the Nasdaq clears 3,700, it will do so from a 'neutral' position in breadth metrics. That is, we are not looking at a particularly good buy-and-hold signal, but we are looking at something which could give a solid % return as stocks will not have had a chance to sell off to a point where fear could become an issue.
Although the Nasdaq Summation Index is on the verge of giving a nice 'buy' signal (ideally, I like to see this around -800 for a strong buy; but it would take another 2-3 months of declines from here and I don't see this happening at the moment).
The Russell 2000 is the only index caught in a bit of a bind. Channel support looks good and 1,000 will be key psychological support. However, the 'Death Cross' between 20-day and 50-day MAs has so far proven enough to contain things. I think it will break higher today, but wait for this to happen before going long.
Futures are pointing to a higher open, so it could be a solid day for the bulls if indices start above resistance MAs.
---
All Contributions Welcome - Thank You!
Follow Me on Twitter
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.
JOIN ZIGNALS TODAY - IT'S FREE!
