Tuesday, September 06, 2011

Daily Market Commentary: Bulls Step In

It wasn't a pretty start, although most of the damage was done yesterday in the Futures market rather than today. The recovery took a while to get going, only picking up steam when European markets shut their doors. The bounce from lows was enough to confirm angled consolidations which may suggest more upside for tomorrow.

The S&P has the 'cleanest' looking channel. The index closed just below its 20-day MA, but a continuation of the late day surge could see this work as support. Volume climbed to register as distribution and there was a 'sell' trigger in on-balance-volume.

S&P 500 Large Cap Index ($SPX)
via StockCharts.com

The Nasdaq hasn't quite got the consolidation definition of the S&P, but the bull trap is clear. Volume climbed to register distribution.

Nasdaq Composite ($COMPQ)
via StockCharts.com

Meanwhile, the Russell 2000 had a quiet day. It didn't suffer the large gap lower at the open, but didn't rally strongly either. More of a case of 'no news is good news'.

via StockCharts.com

For tomorrow, look for the afternoon rally to extend into morning trading (baring any more shocks overnight). Watch for supply when markets make it back to September swing highs.

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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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