Daily Market Commentary: Russell 2000 Breakout

On the third day. bulls were finally able to take out the Russell 2000's 'bull trap' created by September's breakout. Technicals improved without taking out the MACD trigger 'sell'.  Those smart enough to have bought the test of channel support will have done well.  Next target is channel resistance.


The other index to have performed well is the semiconductor index. Today's close marked a breakout similar to that of the Russell 2000, although given the more modest climb it's more likely to continue its advance.


Action in the semiconductor index is good news for the Nasdaq and Nasdaq 100. The Nasdaq 100 closed a new closing high - nicking a breakout (although I would like to see a little more to confirm the breakout).


The S&P is effectively range bound, but today's action turned technicals net bullish.


The rally continues.  Bears will be looking for 'bull traps', but the broader action favours bulls - so shorts will need to be nimble.

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