Thursday, March 08, 2012

Daily Market Commentary: Decent Recovery But Volume Lacking

Whatever attacks Shorts may have planned failed to materialize as markets closed near their highs. Volume was below yesterdays and below the heavier selling volume of Tuesday. Markets which traded just below 20-day MAs before today's open managed to finish the day above them.  At least for now, buyers are prepared to step in and bid markets up while sellers have remained largely absent.

The S&P recovery will soon have to contend with former channel support - turned resistance. Techncials are holding on the bull side, although ADX has become prone to whipsaw; recovering to the bull side after a recent 'sell'.

The Nasdaq gapped above its 20-day MA and managed to spend the whole day above this moving average. Volume climbed to register a mild accumulation day as on-balance-volume reversed yesterday's sell trigger. The index is well position to challenge the 3,000 high.

The Percentage of Nasdaq Stocks above the 50-day MA managed to find support at the rising trendline.  This offers reason for optimism for Nasdaq bulls - although technicals remain firmly net bearish.

Meanwhile the Russell 2000 finished just a partial point away from its high and has another 10 points to go before reaching its 20-day MA.

Will it be third time lucky? Volume could have been better but the past two days have seen markets close near their highs. This keeps the picture bullish until proven otherwise.


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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 Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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