The Nasdaq found buyers just above 4,900 and the 50-day MA. Buying volume was a little light, but that might be enough to lull shorts into a false sense of security. The relative performance of the index continued to shift towards Large Caps and away from Tech, which may be a worry if the rally doesn't kick on.
The S&P recovered 2,045, creating in the process a possible 'bear trap'. The index also saw a healthy uptick in relative performance against both Small Caps and Tech. While the broader success of the rally requires participation from all markets, buyers of Large Caps stocks won't be complaining. A reversal of 'sell' triggers in technical indicators would be welcome now.
The Russell 2000 had the clearest buying chance with the successful defense of former channel resistance turned support along with a positive of the 50-day MA. The index didn't hog the limelight in terms of percentage gains, but today was a good day for the index.
For tomorrow, loo for a bright start, particularly if premarket starts a little soft. Shorts will try to reverse the gains, so it will be up to bulls to press the advantage gained today.
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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