Thursday, December 02, 2010

Daily Market Commentary: Push Through 20-day MAs

The S&P was able to break clear of the November decline, pushing through the 20-day MA - albeit on slightly lower volume. There was a modest technical improvement but the early bear warnings haven't reversed (although technicals are still on a confirmed 'buy' signal - the thick green line on the chart).



The Nasdaq gapped to its 20-day MA, but was unable to push higher. The gap might yet close if Wednesday's open price (2,535) is undercut.



The real winner on the day was the Russell 2000. It cracked through tricky 736 resistance on a MACD trigger 'buy'. The move was enough to negate the early bearish technical swing, meaning bears have it all to do.



The other mover was the semiconductor index. Yesterday's doji at the 20-day MA, which had suggested a bull trap to the earlier breakout, has done a total 360 and is now a bear trap with 20-day MA support. The sharp 3% gain has given semiconductor index bulls some wiggle room.



Despite the picture perfect bounce off the 50-day MA for the S&P, or the clean breakouts for the Russell 2000 and Semiconductor index, there was a worrying lack of push beyond the initial opening gap. Tomorrow will offer an opportunity for bulls to add to the tally with 20-day MAs available to provide support. Can they do it?

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