Daily Market Commentary: Good Recovery from Morning Losses

In what started as a gap down sell off quickly reversed into a powerful rally. Volume rose across indices to register an accumulation day.

The S&P finished just below its 20-day and 50-day MAs, so resistance at moving averages is still an issue, but the nature of today's buying suggests an upside break tomorrow.


via StockCharts.com

The Dow went a step further and cracked above 20-day and 50-day MAs. This is good news for bulls looking for likewise from the S&P.


via StockCharts.com

The Nasdaq closed with a bullish engulfing pattern as it defended 2,670 for a third day.


via StockCharts.com

While the Russell 2000 defended the 50-day MA at Wednesday's low while pressuring channel resistance by the close. Watch for a channel breakout tomorrow (it's not going to take much).


via StockCharts.com

However, lingering resistance remained in the Nasdaq 100 as dictated by the breakdown gap.


via StockCharts.com

With a breakdown gap of greater significance in the semiconductor index.


via StockCharts.com

Bulls have the edge, but now it's up to them to grab the nettle and break the last remnants of resistance.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Zignals Trading Strategy Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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