Sunday, February 22, 2015

Dow Breakout Continues Market Strength

A fresh breakout for the Dow continued the strong run of form for the indices. The Dow closed above 18084, as early morning weakness was unable to crack bulls resolve. Volume climbed to register accumulation.


The S&P was able to put some distance on the breakout, following a series of narrow range days just above support. The index also registered an accumulation day.


The Nasdaq is close to tagging the 10% moving average envelope (of the 200-day MA); although the fifteenth percentile for profit taking is when the Nasdaq is 14.5% above its 200-day MA (as per the table at the bottom of this article). Like Large Caps, the index registered an accumulation day.


Helping to drive the Nasdaq rally is the expanding breakout in the Semiconductor Index.


The Russell 2000 was able to tag breakout support during Friday's session, but recovered to post new highs by the close.


Things are nicely set for Monday. Bulls hold the advantage with the breakouts, but bears could regain control if they push markets into 'bull traps' (with a close below breakout support).  The tone set after the first 30-minutes of trading on Monday could be key.

You've now read my opinion, next read Douglas' and Jani's.

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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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