Daily Market Commentary: S&P Breakout Lost & Happy Paddy's Day

The S&P breakout (from the January highs) was negated on Friday's close, effectively converting the February-March rally into the boundary for a horizontal trading range. There was a 'sell' trigger in On-Balance-Volume to follow the earlier one for the MACD.

The Nasdaq is hanging on to its breakout. The 20-day MA didn't act as much support, but 4,231 still has an opportunity to play a role as a place for demand.

The Russell 2000 also 'bull trapped' its breakout, but Friday's buying is attempting to develop a swing low at 1,180 support. However, technicals are weakening and not yet oversold - suggesting Friday's attempt at building support may be in vain. Aggressive longs would probably not want to hold on a push below 1,170.

It's perhaps a little early for a new swing low, although breakout support may offer bulls a chance on Monday. Keep stops tight if going long.

Otherwise, have a Happy St. Patrick's Day!

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