Stock Market Commentary: Dow Breaks Resistance

After a few days of lingering just below declining resistance the Dow was able to push above and make a new 2-month closing high. Volume was very light which weakened the significance at what should have been a strong buying day.

The lingering underperformance of the Nasdaq 100 with its tag and retreat at the 200-day MA is another poin of concern. The inverse bullish hammer cames at a time there of sharp drop in relative strength compared to the bull-market-leading Russell 2000 index.

Luckily, the sharp underperformance of the Nasdaq 100 to the Russell 2000 was because the Russell 2000 had a very good day. There is still a chance it will make it to the 200-day MA before the rally stalls; the earlier bull trap from April 20th was negated.

I would be bearish on the Nasdaq 100 at this point but still net bullish on the Russell 2000 and Dow. Conflicting times!

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

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