Showing posts from July, 2010

Weekly Market Commentary: Slows as Resistance Approaches

The rally of the last few weeks slowed as the week finished with a narrow doji for many of the lead indices. The bear flag highs remain resistance and the bulls challenge to break the intermediate-term bear trend. Volume dropped, reflecting a consolidation - not a sell off, to the slightly lower close on the week. With the slowing in the up trend it might be a quiet couple of weeks. The watch areas remain Fibonacci retracements with the first test of 61.8% so far a success but two more remain to challenge on future weakness. ($SPX) via The Nasdaq still has a bearish head-and-shoulder pattern to consider, although the July decline put this to the test. Nasdaq via Likewise for the Nasdaq 100, it has an alternative neckline which extends back to 2006 at 1,702. ($NDX) via The Russell 2000 has a large trading void to fill. The void is made all the more enticing with stochastics well off oversold conditions; 614 support down to 59

Daily Market Commentary: Stall Day 2

It was a roller coaster of a day but in the end markets finished slightly lower. Early action saw challenges on resistance as marked by Monday's highs, but markets were unable to push their advantage. The S&P finished with a 'spinning top' on heavier volume; volume was enough to generate a sell trigger in on-balance-volume. There is an upcoming 'golden cross' between 20-d and 50-d MAs which means the 20-day is going to be the support area on the pullback. ($SPX) via The Nasdaq touched bases of the 200-day and 50-day MAs. With the declining trendline (former channel resistance) to work with there is a chance we will see buyers make a stronger stand at the convergence of trendline, 20-day and 50-day MAs. ($COMPQ) via The Russell 2000 played to form and tested the converged 20-day and 200-day MAs. If the market closes lower tomorrow it would suggest converged MAs will not hold. ($RUT) via The Dow violate

Daily Market Commentary: Markets Ease Back

The S&P pulled away from its 200-day MA on light volume. No great surprise given yesterday's higher volume indecision. Both 50-day and 20-day MAs are a couple of percent away which suggests 2-3 down days to come. ($SPX) via The Nasdaq eased back onto its 200-day MA which may attract some buyers although it's a little early for other indices. ($COMPQ) via Small Caps took a larger step back at the same time of a 'Death Cross' between 50-day and 200-day MAs. Another day like today would see these moving averages tested. ($RUT) via But the Dow bucked todays' other market activity with some continued tight trading. Trading range support held which is bullish as is the proximity of the 200-day MA. ($INDU) via All-in-all, today's action will not have come as a surprise. Tomorrow could see more of the same before moving averages start kicking in as support. Follow Me on Twitter Build

Daily Market Commentary: Stalling Action

The past few days have been very good to bulls and today's action was a pause in the advance. Some indices fared better than others and tomorrow will likely see a little more downside, but as long as the past few days gains' hold (perhaps with the help of lead moving averages) it will be a good buying opportunity for bulls. The S&P finished with a narrow doji on the 200-day MA. Volume climbed to register a churn day, but not necessarily bearish. ($SPX) via The Nasdaq was a little more bearish with a bearish 'cloud cover' candlestick, but volume was not in line with distribution. ($COMPQ) via Small Caps also closed with a bearish cloud cover at two levels of resistance. ($RUT) via We have a tentative higher low for the indices; if the mid-July reaction low for all indices can hold there is a good chance the early-July 'bear trap' is going to mark a bottom perhaps lasting the rest of the year. It wo

Daily Market Commentary: Small Caps Take Charge

The third day of big gains swung the market sharply in favour of small caps over tech and large caps. Index relative strength has moved from the bearishness of early summer to the bullishness of today - now it's up to buyers to press their advantage. For the Russell 2000, Friday's trading saw the 50-day and 200-day MAs breached while Monday saw the index finish just below a thinly defined (and therefore not potentially very strong) resistance area. Technicals are net bullish which turns future retracements to key moving averages - 20-day MA in particular - into buying opportunities. ($RUT) via The S&P finished just above its 200-day MA while volume was a little light, although not unusual for this time of year. The shift in relative strength from Large to Small Caps is clear to see. ($SPX) via Tech went a little further than the S&P having inched above its 200-day MA on Friday and added another percentage point today. June react

Sewell MiniDeck Review

When it comes to trading you can never have enough visual workspace. Specialist graphic cards make adding multiple monitors easier but these are costly and if you are not interested in tinkering with your system then it's not a particularly attractive option. For many, desktops are going the way of the Dodo so finding a laptop which can support more than one additional monitor can be near impossible and likely uber expensive (is there a laptop which can do this - do dual graphic card laptops have additional DVI slots?). In either case, if you are looking for an easy solution on getting an extra monitor with VGA/DVI support all from a USB port then the Sewell Minideck fits the bill. Out of the box, you get the Minideck, installation CD, DVI/VGA adapter, a cloth carry case, and USB connector cord (no external power source required). As a test system I used an 'old' (2 1/2 year) entry model Vostro 1400 with integrated graphics card using Vista hooked to a Dell E228WFP, wit

Weekly Market Commentary: Pushes Higher

The S&P closed the week up 3.55% higher but hasn't yet cleared the highs of the bear flag which lurk at 1,131 but so far the initial decline from 2010 highs has honored Fibonacci retracements ($SPX) via In support, the NYSE Summation Index looks to have flinched and jumped early. A stochastic 'buy' is undermined by the lack of the oversold condition in the index itself. ($NYSI) via The only S&P breadth indicator to confirm a bottom (so far) is the S&P Percent of Stocks Above the 50-d MA. It has jumped from a low of 5.4% to 66.0% in a number of weeks. ($SPXA50R) via The Nasdaq has pulled further away from its head-and-shoulder reversal neckline but it hasn't yet reached an oversold condition. Nasdaq via The Percentage of Nasdaq stocks above the 50-day MA matched its S&P cousin with a confirmed 'buy' signal. ($NAA50R) via So while the S&P and Nas

Daily Market Commentary: Breakout Part II

First there was the break of the April-July channel, then there was a new down channel marked from June-July, now there is an upside break of the June-July channel. Whether the modest breakout for the S&P marks another shift back towards bulls - today was significant in reversing a picture perfect rebuttal at channel resistance. Thursday's was also enough to reverse a 'sell' cross between the +DI and -DI. ($SPX) via " The Nasdaq also crept out of its major April-July channel but the concern is the proximity of the 200-day MA directly overhead. Hard to say if this is a true breakout? Relative strength is swinging back to more speculative tech stocks from safer large caps - a bullish development - particularly when the last (bearish) signal was June 1st. ($COMPQ) via Small Caps also cracked above its downward channel, although technically it's in worse shape than either tech or large cap indices. ($RUT) via

Daily Market Commentary: Bears Double Down on Bulls

Bernanke stuck a fork in the rally as markets gave up yesterday's gains. The day's highs did enough to test resistance but nothing more. Volume edged higher to mark confirmed distribution for all key averages. The S&P is close enough to suggest a test of Tuesday's lows with subsequent targets of 1,049 and 1,011. ($SPX) via The Nasdaq touched channel resistance which is in close proximity to the 200-day MA; 2,152 is bulls last stand before a trip to 2,050 looks on the cards. ($COMPQ) via Small Caps reversed off the 20-day MA which itself lies close to channel resistance. Trending lower and underperforming to lead averages. ($RUT) via With today's disappointing action, Thursday is looking like it will be another down day for stocks. Follow Me on Twitter Build a Trading Strategy Business in Zignals Subscribe to one of 58 trading strategies covering US, UK, Canada, Forex, ETFs, Frankfurt, Australia

Daily Market Commentary: Better Stuff From Bulls

Where yesterday was a little mixed with indecision, today bulls took the opportunity to stamp their authority. The S&P enjoyed a higher volume accumulation day but remains range bound by my newly defined down channel ($SPX) via Similar story for the Nasdaq with support at 2,152 holding. ($COMPQ) via Small Caps enjoyed a bullish engulfing pattern to yesterday's doji ($RUT) via While the SOX dug in at the 200-day MA with a doji ($SOX) via With resistance overhead it's likely to be a relatively quiet day but should bulls clear newly defined down channels it could be another day for closing at the day's highs. Breadth indicators still edge in favour of a bottom. Follow Me on Twitter Build a Trading Strategy Business in Zignals Subscribe to one of 58 trading strategies covering US, UK, Canada, Forex, ETFs, Frankfurt, Australia or Irish Markets Dr. Declan Fallon, Senior Market Techni

Daily Market Commentary: Modest Recovery

No surprise to see modest gains following Friday's sell off. Volume was light which reflected the lack of true conviction on the part of buyers. For the S&P it has been a strange past couple of weeks. The S&P shifted from a bear trap to a bull trap as the rate of descent from April's high slows. I have redrawn a new channel which reflects this new rate of loss. ($SPX) via But the Nasdaq has not shifted course and remains in its dominant downtrend. ($COMPQ) via Small Caps are struggling inside a narrow channel and below all key moving averages. Relative strength has swung sharply away from the Nasdaq and S&P - a distinctly bearish scenario. ($RUT) via With the new channels in place it's now a matter of tracking their relevance to the existing trend. Follow Me on Twitter Build a Trading Strategy Business in Zignals Subscribe to one of 58 trading strategies covering US, UK, Canada, Forex, ETFs,

Weekly review of charts

Friday was a rough day for the markets and left the mini-rally in tatters. What had Stockcharters to say about it? Richard Lehman of the kicks off with channel breaks: 7/18 -- Short term blue minis all broke Friday and long term declining purples held. The long term trend wins, and right now the direction is quite clear. The new red minis that began Friday cannot all be drawn yet, but the breaks and the direction are indisputable. The ultimate downside target on the long term purple channels could be 8-10% down from here, but lets see how it plays out before we bet the farm on short positions. Earnings reports are still liklely to cause volatility in the next few weeks. 7/15 -- A number of short term minichannels have now changed slope but are still trying to climb, so I've drawn them as larger green channels now. Volatility dropped sharply when the breaks did not follow through to the downside. The dollar keeps dropping, but Toronto stocks sure had a nice


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