Daily Market Commentary: Low Volume Gain

Plenty of points put on the board, but no real volume given the gain. On a positive note, the volume registered was above yesterday's, ranking the day as an "accumulation" day.

The S&P had the lowest relative volume gain. The index closed above the April swing low at 1,294 (just) which may potentially signal a bear trap. If the latter is to prove true then it will be important the index can hold - and close - above 1,290. This will offer a platform to push higher. Today saw a MACD trigger 'buy' to follow that in on-balance-volume.


via StockCharts.com

The Nasdaq enjoyed more buying volume but is technically weaker. Tuesday's gain was enough to see the Nasdaq regain 200-day MA support.


via StockCharts.com

Working in the Nasdaq's favour is the bear trap in the Percentage of Nasdaq Stocks Above the 50-day MA. This swing was built off an oversold market condition and is helped by CCI and MACD 'buy' triggers. There might be enough to see the Nasdaq rally for a couple more weeks.

Nasdaq Percent of Stocks Above 50 Day Moving Average (EOD) ($NAA50R)

via StockCharts.com

The Russell 2000 reacted against its short term trend and likely caught many shorts out. The pennant broke to the upside (helped by channel support), adding over 2% and closing above its 20-day MA. It too enjoyed a MACD trigger 'buy'.


via StockCharts.com

As for tomorrow. The Nasdaq probably offers the best upside given the rally off an oversold breadth condition. Bulls will want the Nasdaq, Russell 2000 and S&P to consolidate their gains, providing a platform for a drive higher. A small loss would perhaps be as welcome as a small gain in such circumstances.

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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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