Monday, September 17, 2012

Daily Market Commentary: Technicals Improving

Thursday and Friday of last week contributed to significant improvements in supporting technicals of indices.  The two days of gains negated any developing bearish conditions in technicals.

The Nasdaq 100 was able to finish last week with a new MACD trigger 'buy' in support of an earlier 'buy' trigger in on-balance-volume.  Recent buying spikes confirmed the break of 2,795 with relative strength having moved sharply in favor of Tech over Small Caps.

The Nasdaq 100 is also trading ahead of the Dow, although the relative strength switch is just recent.  However, the Dow has broken out of its (once bearish) rising wedge on huge volume.

The Russell 2000 has also enjoyed accelerating gains, aided and abetted by bullish supporting technicals and a relative shift to Small Caps from Technology stocks.

The lagging of Technology stocks can be seen in the semiconductor index.  Here the index is struggling to hold on to 200-day MA support. If it can crack above 410 it will help rotate money back into Technology stocks.

Tuesday may see today's modest losses extend, but for the next rally to evolve it will likely require the semiconductor index to pop above 410.  Watch for breakout opportunities in this index.


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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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