Daily Market Commentary: Bear Channels Break For Large Caps

The tension of the past couple of days released to the upside which kept momentum with bulls. Volume was mixed which undermined the extent of the gains for some of the indices, but there was substantial technical improvement - particularly for large cap indices.

The S&P cracked above the declining channel and finished on the 50-day MA. Technicals are net bullish which was last achieved in February so it's a significant improvement on activity for recent months.

($SPX)

via StockCharts.com

The Dow was similarly impressive, going one step better to finish on its 200-day MA having started the day at its 50-day MA. With technicals net bullish and all key moving averages cleared it is the most bullish of the lead indices.

AAAAAAAAE Dow Jones Industrial Average ($INDU)

via StockCharts.com

The index to watch tomorrow is the Nasdaq; today finished at converged 200-day and 50-day MAs with a 'Death Cross' imminent. However, it also registered an accumulation day. Unlike large caps the Nasdaq remains trending inside its down channel.

($COMPQ)

via StockCharts.com

The Russell 2000 enjoyed the biggest one day gain, pushing through both 20-day and 200-day MAs. The 50-day MA is 9 points above and will be next resistance.

($RUT)

via StockCharts.com

The semiconductor index remains on course to test 377 as technicals turned net bullish.

($SOX)

via StockCharts.com

For tomorrow it will be important for large caps to hold their bear channel breakouts and for the Nasdaq to push through converged 50-day and 200-day MAs.

Follow Me on Twitter

Build a Trading Strategy Business in Zignals



Dr. Declan Fallon, Senior Market Technician for Zignals.com, offers a range of stock trading strategies for global markets, also available through the latest rich internet application for finance, the Zignals MarketPortal or the Zignals Trading Strategy MarketPlace.

Zignals offers a full suite of financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own trading system and sell your trading strategy in our MarketPlace to earn real cash. Read what others are saying about Zignals on Investimonials.com.
JOIN US TODAY - IT'S FREE!

Popular posts from this blog

S&P "Bull Trap"?

Image
I thought there was sufficient evidence to argue against a "bull trap" in the S&P, but it would appear the market wasn't interested in such thoughts and sellers were quick to reverse the initial push above 4,200.  Adding to the pain were new 'sell' triggers in MACD and On-Balance-Volume, although the former occurred above the 'bullish' zero line, making it a weak signal. Selling volume ranked as distribution as selling momentum picked up speed.  The index is also underperforming relative to the Russell 2000. 
Read more

"Black Candlesticks" are a concern for the S&P and Nasdaq

Image
A bright start for bulls on the back of positive $NVDA earnings wasn't enough to generate a day of meaningful gains.  However, it did help stall the losses of the last couple of days. The Nasdaq was the biggest beneficiary of today's action, but not enough to see an end-of-day finish that cleared last week's swing high, nor delivery of a large white candlestick, despite the morning breakout gap.  Technicals are net bullish and relative performance against the S&P has become consistently stronger since the start of May.  While today's candlestick I would view as typically 'bearish', today's volume ranked as confirmed accumulation (bullish). Overall, I would be looking for higher prices from here. 
Read more

Round 2 for the bearish "black" candlestick in S&P and Nasdaq

Image
The Nasdaq started brightly but ended up closing below its open price, but above yesterday's close. The S&P did something similar, although the intraday range is narrower. These two setups are somewhat complicated by the new 'buy' triggers in On-Balance-Volume for both the Nasdaq and S&P. And the new MACD trigger 'buy' for the S&P. Price action is key, so I would expect the candlestick to trump the technical picture; watch for lower prices tomorrow.
Read more

Archive

Show more