Daily Market Commentary: Small Caps lead

It was Small Caps which took the market by the scruff of the neck and powered past 50-day MA and never looked back. The Small Cap rally went all the way to the 20-day MA which may see some selling tomorrow, with preliminary channel resistance drawn from late April highs lingering around 720.


via StockCharts.com

Strength in Small Caps likely kept shorts wary on attacking 50-day MAs for Large Cap and Tech averages; in the case of the Nasdaq it was able to close above its 50-day MA, but a declining 20-day MA is only 25 points away and may provide supply on Thursday. Relative strength swung back in favour of Tech over Large Caps.


via StockCharts.com

And Small Caps over Large Caps - where the 50-day MA remained resistance.


via StockCharts.com

Semiconductors also enjoyed the day and closed above its 50-day MA with declining resistance in play for Thursday


via StockCharts.com

We have seen three strong days in a row after four hard days down. Is there the confidence to build on this or will the market drift lower for a couple of days? Babak of TradersNarrative makes a good case for buying but market breadth can and has been lower in the past. Having said that, I have used BP's troubles to take another nibble for my investment account; I have about 30% of what I plan invested.

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