Wednesday, March 23, 2011

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.



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.



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



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).



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



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



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 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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