Stock Market Commentary: Bulls try again

With President Obama safely in place in the Whitehouse attention turned back to the markets. Bulls made a second run at buying, undoing most of yesterday's damage and in the case of the Nasdaq, did so on higher volume accumulation. 20-day and 50-day Moving Averages remain key resistance and this pressure will increase as markets pull themselves away from oversold conditions.


Small caps really need to show leadership if confidence is to be restored. The 20-day MA is more important than the 50-day MA in this regard and a new reaction high past 519 would set up a sequence of higher highs and higher lows. How big and ask is it? Technicals are mixed, but are siding with bears - so today's strength was not one to buy.


The other area to watch is the semiconductors. The SOX is clinging to its 50-day MA and unlike other indices did not violate reaction lows yesterday. However, it is underperforming against the Nasdaq 100 and this needs to improve if it is to influence the Nasdaq and Nasdaq 100.


Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Popular posts from this blog

S&P "Bull Trap"?

Image
I thought there was sufficient evidence to argue against a "bull trap" in the S&P, but it would appear the market wasn't interested in such thoughts and sellers were quick to reverse the initial push above 4,200.  Adding to the pain were new 'sell' triggers in MACD and On-Balance-Volume, although the former occurred above the 'bullish' zero line, making it a weak signal. Selling volume ranked as distribution as selling momentum picked up speed.  The index is also underperforming relative to the Russell 2000. 
Read more

"Black Candlesticks" are a concern for the S&P and Nasdaq

Image
A bright start for bulls on the back of positive $NVDA earnings wasn't enough to generate a day of meaningful gains.  However, it did help stall the losses of the last couple of days. The Nasdaq was the biggest beneficiary of today's action, but not enough to see an end-of-day finish that cleared last week's swing high, nor delivery of a large white candlestick, despite the morning breakout gap.  Technicals are net bullish and relative performance against the S&P has become consistently stronger since the start of May.  While today's candlestick I would view as typically 'bearish', today's volume ranked as confirmed accumulation (bullish). Overall, I would be looking for higher prices from here. 
Read more

Round 2 for the bearish "black" candlestick in S&P and Nasdaq

Image
The Nasdaq started brightly but ended up closing below its open price, but above yesterday's close. The S&P did something similar, although the intraday range is narrower. These two setups are somewhat complicated by the new 'buy' triggers in On-Balance-Volume for both the Nasdaq and S&P. And the new MACD trigger 'buy' for the S&P. Price action is key, so I would expect the candlestick to trump the technical picture; watch for lower prices tomorrow.
Read more

Archive

Show more