Tuesday, November 26, 2013

Daily Market Commentary: Tech and Small Caps' New Highs

Bulls will probably be a little disappointed the trading week is cut short by Thanksgiving, as the Nasdaq, Nasdaq 100 and Russell 2000 all posted strong gains on decent volume.

The semiconductor index also got into the action with what's shaping up to be a 'bear trap' and potential breakout. Only a MACD trigger 'buy' awaits for a net bullish turn in technicals.


The Nasdaq 100 finally took out its 'bull trap' and is about to generate a new MACD trigger 'buy'.  This will turn all technicals net bullish.


The Nasdaq was able to take this a step further with a breakout, 'bull trap' negation, and a fresh MACD trigger 'buy'. The rally is contained within its rising channel and it will meet resistance if tomorrow offers another gain. Better still, there is a relative strength against the S&P: this marks a rotation out of defensive Large Caps into more speculative Technology stocks.


Leading against the Nasdaq is the Russell 2000. Small Caps had the best of today's action, and are best placed to advance: new highs.  In addition, channel resistance is well away.


Buyers have another of options to follow: a pending breakout in the Semiconductor index, improving Tech averages, or market leading Small Caps. Whatever was on offer for shorts last week has disappeared over the last couple of days.

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