Daily Market Commentary: Bulls Do The Bare Minimum
The S&P saw a close over its 20-day MA with Friday producing a MACD trigger 'buy', with on-balance-volume and intermediate-term stochastics close to 'buy' triggers too. The tight "coiling" action of the past couple of days will unwind soon. Should the unwind push prices higher there is a good chance the downward price channel from April will break as part of the unwind.
The Nasdaq closed below its 20-day MA but had a MACD and on-balance-volume 'buy' trigger. Volume rose to register a modest accumulation day - but really, overall volume remained light.
Small Caps created a 'bear trap' with Friday's higher close but remains troubled by 20-day (and likely 200-day) MAs overhead. However, Monday's losses weren't enough to question the validity of the 'bear trap'.
Again, semiconductors offer the best support for the Nasdaq and Nasdaq 100 with its close above the 50-day MA leaving it above the three key moving averages: 20-day, 50-day and 200-day MAs. Intermediate term stochastics and the MACD followed the CCI with 'buy' triggers. Should be enough to see a test of 377.
The market is poised for a big 1-2 day swing, but it's not immediately clear which way recent tension will break. The proximity to resistance offers bulls a powerful incentive to break the trend but form suggests the move will be down. It's easy enough to place stops if going short, long-side is a little trickier because of the risk of whipsaw.
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