Monday, March 12, 2012

Daily Market Commentary: Tight Trading

Monday traded like a holiday with low volume and a narrow intraday range.  It was no coincidence this action occurred near resistance, with bulls doing little to challenge it.

The S&P posted a small doji just below the February high.  Technicals hed firm with the MACD on course to trigger a 'buy' and reverse its one bearish indicator. Swing traders can use a break of Monday's doji high/lows as the basis for a trade.

The Nasdaq experienced a similar day, closing slightly down.  The index is sitting on the cusp of a challenge on 3,000.

But semiconductors suggest the Nasdaq might have to wait a little longer before it breaks 3,000. Today's semiconductor action was a clear reversal of Friday's gain, below February's congestion and away from its 20-day MA.

Small Caps are attempting a move inside the February congestion zone but it's encountering supply at its 20-day MA; a moving average both Nasdaq and S&P have cleared.

On Tuesday, look for swing trade opportunities off S&P and Nasdaq doji.  A bearish break is more likely given weakness in semiconductors and the struggle in Small Caps.


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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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