Daily Market Commentary: First Attempt To Break Declining Trend Fails

A day too far for bulls after two days of gains (albeit low volume on Friday). The S&P was repelled by the 200-day MA which also took it below declining resistance after an earlier break through. There was a MACD trigger 'buy' which may provide the impetus for bulls to have another crack at resistance. However, volume will need to improve which was light on today's selling but also disappointing during Friday's buying.

($SPX)

via StockCharts.com

The Nasdaq managed to break and hold declining resistance on Friday (into Monday), also enjoyed a MACD trigger 'buy' and closed Monday above the 200-day MA. Better action from tech stocks.

($COMPQ)

via StockCharts.com

Small Caps are caught between large and small caps, finishing on channel resistance but is well above its 200-day MA. Relative strength has shifted in favour of small cap leadership (bullish) with a MACD trigger 'buy'. Watch for pending (bullish) breakout for the CCI.

($RUT)

via StockCharts.com

Breadth indicators are also showing improvements with a likely bottom in the Percentage of Nasdaq Stocks above the 50-day MA.

($NAA50R)

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With the Summation Index showing improvements with a MACD and CCI 'buy' in addition to a bullish cross of 3-day and 5-day EMAs.

($NASI)

via StockCharts.com

With market breadth there is a good chance bulls will bid up weakness off Monday's close. In the case of the S&P, the May-June low looks like an "Adam-and-Eve" bottom; a break of neckline resistance of 1,105 will be required for confirmation.

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