Stock Market Commentary: Bulls Pushing Their Luck

Bulls kept bears out of the game for yet another day as the rally powered higher. Small Caps built on their leadership (note relative strength to the Nasdaq) as the MACD trigger line climbed to new 6-month highs. While markets may not necessarily head down tomorrow bulls should be looking for a test of the 20-day MA before another challenge of highs is made.

The worry with the advance as sharp as it has been is its similarity to a blowoff top; if we start to see more gaps it will take on the characteristics of an exhaustion run.

The Nasdaq hasn't yet embarked on such a run, but note how rising support is merging with the rate of advance in the 20-day MA - likely to see a key test here soon.

While the S&P should follow Tech and Small Caps higher, it's up against resistance of 1,150. If an excuse is needed for a sell-off this is it.

But the Nasdaq Summation Index doesn't look done yet; bullish for Tech (or at least less bearish if a sell off emerges).

Watch for an exhaustion run which will kick off with opening gaps. The 20-day MAs are the area to watch for support on the next pullback.

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