Daily Market Commentary: Bear Traps or Shorting Opportunity?
It was another eventful day for some key markets. Large Caps were relatively quiet; the S&P added 0.5% which was enough to regain the 20-day MA but volume was light. Technicals improved with a bullish cross between +DI/-DI. ($SPX) via StockCharts.com The Nasdaq managed a clear bear trap after last week's successful test of its 50-day MA. Monday's black candlestick is typically viewed as bearish, but the small decline back to 20-day MA support offers an opportunity for bulls to push on. ($COMPQ) via StockCharts.com The premise for a bullish reversal in the Nasdaq is helped by a larger bear trap in the Percentage of Nasdaq Stocks above its 50-day MA. ($NAA50R) via StockCharts.com But the picture for the Nasdaq 100 is not so optimistic. Monday's bearish black candlestick sat on resistance (former channel support) and offers a better shorting opportunity as part of the gap breakdown. ($NDX) via StockCharts.com The semiconductor index is caught in the middle