Friday, July 08, 2011

Daily Market Commentary: Higher Volume Accumulation

Thursday saw some half decent buying volume, although it was well off a typical accumulation day. Better were the breakout gaps with the Nasdaq and Nasdaq 100. The latter index finished just shy of a new closing high for 2011.

The S&P cleared 1,343 which was the marker level for a bearish head-and-shoulder reversal. Shorts who were looking to benefit were caught with their pants down. Next challenge is to negate the May bull trap.



The Nasdaq enjoyed a powerful gap open, and more importantly was able to retain those gains over the course of the day. It too is looking to negate its bull trap.



The sister Nasdaq 100 enjoyed the best of Tech action and has almost made a new closing high for 2011. When it does it will have negated the May bull trap and will have sent a very positive signal to other lead indices.



The semiconductor index was able to benefit, reversing what had been two days of losses, but not doing enough to break above its 50-day MA. This could still play out as resistance tomorrow.



Finally, the Russell 2000 posted the largest gain on the day, taking it up to what may yet (ironically) be potential head-and-shoulder reversal. But technicals are healthy and momentum is definitely with bulls. It would take an unlikely loss to go back to - and below - 773.



For tomorrow, it would be a stretch to expect another days worth of gains, but a repeat of low volume, narrow trading would be welcome.

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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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