Wednesday, July 29, 2015

Second Day of Gains

Another round of buying swept through Large Cap indices, but other indices didn't enjoy the same level of interest.

The S&P had the best of it. Since the middle of July it has enjoyed a strong advance relative to Small Caps and Technology indices, but it may be time for it to revert to mean. Technicals are a little scrappy, but are holding to the bearish side, but one more day of gains could swing it back in bulls favour.


The Nasdaq banked a small gain, but it's up against the big red candlestick from last week. The 'bull trap' is still in play. Technicals are mixed here too.


The rally in Small Caps has come up against former trendline support turned resistance. Technicals are firmly in the bear camp, giving shorts an opportunity to attack the bounce.


The Nasdaq 100 bounced of the former channel trendline, building off the 'bear trap', but the last three days have seen very narrow trading. One sell off could erase it all and drop it back into trouble, but bulls hold the advantage.


Eyes will be on the Semiconductor Index. If bulls are going to build on weak strength in the Nasdaq and Nasdaq 100, then the Semiconductor Index will need to rally off lows.


For tomorrow, things get a little more tricky. The S&P is back inside the upper range of earlier congestion while the Russell 2000 is up against former support turned resistance. Tech indices are caught in the middle and could go either way.

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. I do a weekly broadcast on Friday's at 13:30 GMT for Tradercast, covering indices, FX and gold, silver and oil - all are welcome! You can read what others are saying about Zignals on Investimonials.com.

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