Tuesday, October 28, 2014

Daily Market Commentary: Powerful Rally

An excellent day for bulls, particular for the Russell 2000. In the case of the latter index, the Small Caps Index broke declining resistance and 200-day MA in an almost a 3% gain. There was also an uptick in relative performance of the Russell 2000 against the Nasdaq and S&P.  This is well placed to continue into a test of the June high (with the September high next).


The S&P is fast approaching the September high, but is first up against 1,987 resistance. Technicals are net bullish, and it has the advantage of a tail wind to drive it higher.  However, it is losing relative ground against the Russell 2000.


The Nasdaq is fast approaching the recent high. It has cleared all prior resistance with only the highs left. Since October, it has also enjoyed a strong relative gain against the S&P. A consolidation would be welcome, but not necessary.


The Nasdaq 100 is running ahead of the Nasdaq, and is likely to be the first of the indices to make a new high.


Markets are due for a decent correction, but it's not necessary for it to start tomorrow. Having said that, it's hard to be a buyer or seller. Bulls will lean on the Nasdaq 100. Bears will be looking at rejections of all-time high tests.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com, and Product Development Manager for ActivateClients.com. You can read what others are saying about Zignals on Investimonials.com.

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