Saturday, September 06, 2014

Daily Market Commentary: Bullish End of Week

After a week of drip losses, bulls came back with a bit of a flourish to finish the week on a positive note.

The Semiconductor Index didn't offer bears a sniff of an opportunity. The inverse hammer from Thursday could have delivered a short position had it undercut the Thursday low, but this didn't happen; instead, it just fell shy of clearing 652 - the July swing high.  A break of 652 is looking more likely for the week ahead. Watch for a new consolidation handle off 652 resistance before the push higher.


Strength in semiconductors is helping to shape a small bullish flag in the Nasdaq. Friday closed with a bullish engulfing pattern which offers an upside follow through opportunity for Monday.


While the Russell 2000 offered longs a chance at channel support, with a 'golden cross' between 20-day and 50-day MAs to attract buyers from the sidelines.  This index is looking a good option for those seeking further gains.


The S&P came 3 points shy of a tag of 1,987. However, this area is looking like good support with bulls well placed to press their advantage.


The Dow broke through from its handle, and unlike the S&P it did take out the July swing high. Note the growing relative strength against the Nasdaq 100, an index it has under-performed since May.  A flight to safety about to begin?


For Monday, longs have a choice of indices to work with: from the channel bounce in the Russell 2000, to the 'bull flag' breakout in the Dow. It's all to play for.

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