It was a mixed day for the indices. Large Cap indices suffered small losses on lighter volume. Tech averages made a small gain on higher volume. Small Caps played closer to Tech action. The S&P will likely see another pass made on its 20-day MA on Wednesday. The 'sell' trigger in the MACD suggests the 20-day MA will not be support, but while the index is above this moving average it's offering a (somewhat weak) buying opportunity.  Non-MACD technicals remain healthy. The Nasdaq has been riding a very tight channel.  This won't hold forever, but until breached it's a buy at support and sell at resistance - today's close was at channel support. However, an opening gap down Wednesday would probably play better as a short with a stop above Tuesday's high. The Russell 2000 is seeing an ever increasing shift in momentum from Small Caps to Tech stocks (see relative strength along the bottom). For tomorrow, there is a weak 'buy' opportun

The early morning dive across markets took the S&P and Dow Jones Index down to their respective 20-day MAs. All indices were able to recover by the close, but not before triggering technical 'sell' signals for MACDs for the aforementioned indices. Bull can take comfort from the sharp drop in trade volume; it was well below that of last week and didn't rank as distribution. Today's touch of the 20-day MA in the S&P looks like a successful support test, but should there be a second test this week then it will likely break and the 50-day MA becomes the next support level. Trading in the Nasdaq was more robust. The index was able to close inside Friday's range and is well above its 20-day MA. Technicals remain bullish. Because the Russell 2000 didn't suffer the same losses at the open it did close down, although the net loss from Friday was slight. Monday's trading is in line with typical bullish behavior; i.e. small losses on low volume

The past week saw some significant moves despite the weaker Friday close. For the indices there was a breakout in the Russell 2000. This cleared the former neckline and brought the index into the congestion zone of the early part of 2011. The Nasdaq also edged a breakout on higher volume accumulation, although the real challenge is the 2011 high. Supporting the break in the Nasdaq was the break in declining resistance of the Percentage of Nasdaq Stocks above the 50-day MA: The Nasdaq Bullish Percents also cleared declining resistance at 58%, leaving room to maneuver to the next (minor) level at 65%. Along with declining resistance in the Summation Index. The S&P built on its breakout from last week with another gain on higher volume accumulation This followed similar breaks in S&P market breadth. The weekly picture continues to look good for bulls. Last week's breakouts in the S&P were followed by breaks for the Nasdaq and Russell 200

Today was the first distribution day for the year in the S&P and the second for the Nasdaq.  Despite the selling there was little change on the nature of the rally. A sequence of selling would obviously change this, but today offered little more than profit taking. Selling in the S&P retraced some, but not all of yesterday's gains. If this is the start of a longer decline then the 20-day MA is the likely support area for buyers to make their next appearance. The Nasdaq is in the same position, although there is a support level at 2,737 which may play as an alternative for buyers to step in. The Russell 2000 also has the benefit of the 20-day MA which has converged with 764 support to help buyers. The extent of today's selling volume is likely to see some follow through tomorrow. Not until 20-day MAs are tested will the integrity of the rally be known. ------ Follow Me on Twitter Dr. Declan Fallon is the Senior Market Technician and Community

Bulls were able to keep the party going as yesterday's consolidation gave way to a day of buying. Volume climbed in confirmed accumulation for all key indices. However, gains in the S&P didn't slow the relative swing form Large Caps to Small Caps (Russell 2000). Or Tech Stocks Although there is a fine balance between demand for Tech and Small Cap stocks - which in itself reflects good diversification in money flow to the markets. Today's action reflects a continuation of the rally kicked off in October and confirmed in December. The Nasdaq 100 is already trading at all-time highs and it looks like the Nasdaq will soon be following suit.  On a weekly time frame, gains for Tech indices have the appearance of base breakouts and may suggest an overall lengthening of the bull market, perhaps to last through 2012. There is little on offer for bears.  While the rally may encourage profit taking, there is little on offer to suggest going short is an option

Despite missing yesterday's update there was little to split today's or yesterday's action. The only index to attempt to put some distance on the two days was the Russell 2000. Small Caps again attempted to retake the leadership role off Tech stocks as relative strength swung back in their favour; there was even a 'Golden Cross' between the 20-day and 200-day MAs. The S&P had two flat days, but technicals kept ticking higher at the expense of a loss in relative strength against the Russell 2000. While the Nasdaq posted a small point gain as Tech stocks continued to pull away from Large Caps. Bulls have the most to be happy with as indices continue to post gains as relative strength pushes more towards speculative issues (=> attracting money from the sidelines). ----- Follow Me on Twitter Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com . I offer a range of stock trading strategies for global m

Nothing fancy for the week, just steady gains for indices.  These gains keep in play the rally from October. Market breadth continued to improve alongside index gains. Certain market breadth indicators are at declining resistance dating back to 2010, important tests, because breach these and the rallies will be well placed to continue for the next few weeks (if not months). The Percentage of Nasdaq Stocks above the 50-day MA is one such market breadth indicator at resistance. With 72% of stocks above this intermediate trend average it suggests the Nasdaq is only in the early phase of its rally (a couple of weeks ago the percentage of Nasdaq Stocks above 50%, was just above 50%). Nasdaq Bullish Percents are above the 50% mark And the Summation Index is above zero These breadth indicators suggest there should be enough for the Nasdaq to break declining resistance (already breached for Small and Large Cap indices) and push on to new highs. The Russell 2000 has made i

Yesterday, semiconductors were stalling out at their 200-day MA; today there was no holding it back. The day started with a gap and didn't look back. In the process of breaking the 200-day MA it also negated the October and November 'Bull Traps'. The gain was also accompanied with a 'Golden Cross' between 20-day and 50-day MAs. The 5% move in the semiconductor index was also good news for the Nasdaq. The Nasdaq broke past 2,737 resistance defined from the October swing high and registered an accumulation day. The December-January rally continues to drive improvement in technicals as the relative shift from Large Caps to Technology issues intensifies. The Nasdaq 100 similarly broke resistance on higher volume accumulation. The Russell 2000 took a back seat on the action, but not before it added nearly 2%.  It was able to break resistance last week so is slightly ahead of the curve, despite losing ground against the Nasdaq. The long side remains th

A little disappointing markets weren't able to push on after a strong start, but many indices registered accumulation days. The S&P finished near its October swing high, although it's in the process of turning this former resistance level into support. While stochastics are overbought, On-Balance-Volume and MACD continue to trend higher on the side of bulls. The Nasdaq retained some of its morning gap, but it's the shift in relative strength towards this index (from Large Caps / S&P) which is the most positive. Perhaps this rally is only just beginning? While the Nasdaq attracts interest from buyers, the Russell 2000 is losing some of its love (to the Nasdaq). However, the swing high breakout holds. The index to watch tomorrow is the semiconductor index.  With the Nasdaq performing well it will be important it can draw on strength in semiconductors. At the moment, the index is struggling at its 200-day MA. The rally keeps on moving higher until

While indices continued their advance for the week, it was market breadth which made the biggest improvement. The Percentage of Nasdaq Stocks above the 50-day MA rose to 62%, leaving it on course to test resistance from late 2010, currently around 70%. The Nasdaq Bullish Percents also crossed the 50% halfway mark. Declining resistance for this index is around the 55% mark. The NYSE Summation Index also played its role. What had looked to be a 'bull trap' in October has turned into a new, shallower angled decline - a bullish development. A push above 750 will break this new resistance point. The Russell 2000 was one of the indices able to make a move as it cleared 760 resistance. The next challenge for the index is former neckline resistance at 780. The Dow also cleared resistance of its channel, albeit on a small gain. Volume climbed to register an accumulation week. Key for this week will be seeing the market breadth improvement convert to points on

Currently in New Jersey on Zignals business so there will be limited updates until next weekend.  Suffice to say, little has changed since indices managed their breakouts. Buying volume has stayed reasonable, even if point gains have been meager. Bulls can take comfort in the swing into more speculative Small Caps from 'safety' issue Large Caps. Buying volume has been good in the Nasdaq as it too makes a relative strength gain against the S&P. The Russell 2000 has managed to break and hold above its 200-day MA. Another bright spot was the break of the 200-day MA in the semiconductor index as it looks to challenge 'bull trap' supply. This is good news for Tech indices. This rally continues to gain strength and take out supply.  A number of support levels are available with upticking 20-day MAs perhaps the most attractive 'buy-the-dip' area on the next move down.  Good Stuff (if you are a bull!). ----- Follow Me on Twitter Dr. De

How much further can the S&P pressure resistance without actually breaking resistance? The tight action over the past couple of days will unwind with a decent one-day move; to catch it, trade break of Monday's high/low with a stop on the flip side. The S&P (Large Caps) is clinging on to its out performance of the Russell 2000 (Small Caps). The semiconductor index enjoyed a strong day, starting with an opening gap and never looking back. It's caught in the no-mans land between its 50-day and 200-day MAs which makes it difficult to define the trend, although bulls are making a decent fist of it. Technicals bullish and improving - this suggests room for further upside. Unfortunately, strength in the semiconductor index didn't translate directly to the Nasdaq.  However, should semiconductors drive above its 200-day MA there will be additional support for continuation of a tech (Nasdaq and Nasdaq 100) rally.  The Nasdaq has the additional benefit of trading abo

I was digging through some old charts and came across this one (originally sourced from the now defunct headlinecharts.com); what it shows is the ordered relationship between yield (bonds), stocks and commodities. When markets make a bottom or top, first to change is Yields, then Stocks, and finally Commodities. In the 4-year business cycle, there is around a 12-month gap between a turn in Yield and Stocks, and around 9-months between Stocks and Commodities.  Yields in 30-year treasuries are fast approaching the swing low in 2008 - a potential support level. Stocks are already in rally mode, but assuming we are still waiting for a bottom in yields then the true bottom in Stocks may be a year away.  Commodities are still in decline, but calling a bottom will first require a confirmed low in Yields and a strong case for a bottom in Stocks.  For now, keep an eye on the 30-year treasuries for a bottom. As for the indices, the Russell 2000 is mounting a fresh challenge on 760 resistanc