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Showing posts from November, 2012

Daily Market Commentary: Higher Volume Buying

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It was another good day for indices.  Volume climbed in a confirmed accumulation day, following through on yesterday's recovery. This keeps the November rally intact, and nicely sets up the 'Santa Rally'. The Russell 2000 managed an upside breakout from its channel.  This coincided with a close above the 50-day MA. Technicals also improved, with the Directional Movement Index the only indicator to fall shy of a bullish turn.  Small Caps are outperforming the Tech indices. The Nasdaq continued its advance, but it didn't make it to its 50-day MA. The S&P finished just shy of its 50-day MA, but given action in the Russell 2000, it should have enough buying juice to see an upside break.  However, relative strength continued to weaken against the Small Cap index. Tomorrow might not be the day, but this rally looks good to see a push above respective 50-day MAs. The 'Santa Rally' is in play. --- Follow Me on Twitter Dr. Declan Fallon is t

Daily Market Commentary: Strong Finish

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After an opening sell off, markets were able to stage a strong recovery to finish the day near the highs. Volume was below yesterday's, but the end day gain was of greater importance. The S&P was able to mount a successful defense of its 200-day MA, but technicals aren't yet net bullish. The 50-day MA is the overhead target. Relative strength remained in Small Caps favour The Russell 2000 finished at channel resistance, but not before putting some distance from its 200-day MA. As with the S&P, the 50-day MA is overhead resistance. The Nasdaq managed to overcome the rebound off the 200-day MA, and it was able to finish a shade above its 200-day MA. The next upside target is its 50-day MA. Today's finish sets up for a move to 50-day MAs.  Ideally, it would have been good to have seen some higher volume accumulation, but there is probably enough to see some upside follow through tomorrow. --- Follow Me on Twitter Dr. Declan Fallon is the Senio

Daily Market Commentary: Selling Intensifies

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There was no great loss in percentage terms, but there was higher volume distribution, which offers some uncertainty going forwards. The S&P is seeing pressure in on-balance-volume (which has effectively flat-lined) to switch negative. While Slow Stochastics is about to switch positive. Bulls will be looking at the 200-day MA for support. Bears will want to attack the 50-day MA. But the next few days could be scrappy. The Nasdaq was repelled by its 200-day MA. Shorts will have an easier time playing against the 200-day MA than waiting for the S&P to get to its 50-day MA. The Russell 2000 had managed to push above its 200-day MA, but finished the day with the index at its 200-day MA. This could swing either way, although improving technicals suggests bulls will reassert themselves, but it may see a temporary drop below this average given the sharp gains in recent days. Wednesday could see today's losses expand, given the sequence of gains posted up until tod

Daily Market Commentary: Breadth Developing Swing Low

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The first day of the post-Thanksgiving holiday saw respectable trading. There was a continued shift away from defensive Large Caps towards more speculative (and bullish) Small Caps. There was also breadth gains in line with a potential swing low for the Nasdaq. The S&P is just shy of a net bullish turn in technicals (stochastics and ADX left to turn).  The 50-day MA is just under 20 points away, which may take a couple of days to get there. The Nasdaq had the best of the day's action, generating a sharp relative gain against the S&P. Technicals may turn net bullish tomorrow, offering further opportunity to build on last week's channel breakout. But the 200-day MA will offer a point of resistance, and a potential attack area for shorts. Helping firm the swing low in the Nasdaq was the improved breadth measure. The Percentage of Nasdaq Stocks above the 50-day MA typically lead the reversal.  This has moved from just 18% of Nasdaq stocks above their 50-day MA,

Motley Fool Bloggers: Movers and Shakers

The (beta) Motley Fool Blog Network is a year old (or close too).  Over this time, it has provided an opportunity for bloggers and writers to contribute articles suitable for syndication over their network and to the broader financial world.  Because it's a young platform, it has provided avenues for new contributors to break through into the blogging world.  Three contributors have already achieved writer contracts with the Fool, and one has taken an editorial position at the company (there may be more who have had success?). Three writer contracts were awarded to:  Brandy Betz ,  Demitri Kalogeropoulos , and  Steven Heller .  While  Jamal Carnette  joined as an Editor for the Fool Blog Network, working alongside existing employees  Michael Finarelli , and  Ralph Casale , and senior editor,  Roger Friedman . Certainly, if you are interested in working or contributing for the Fool, you should follow these individuals to get a flavor of the Fool. Over the course of the year, I h

Daily Market Commentary: Gains Hold into Thanksgiving

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In a quiet day for the markets, all managed to retain the gains booked on Monday. There were some technical improvements, notably the MACD trigger 'buys' for the Nasdaq, Nasdaq 100, Russell 2000 and S&P. Only the Dow Jones was excluded from the MACD love in. The upcoming challenge for these indices are 20-day MAs. The Nasdaq enjoyed an On-Balance-Volume 'buy' trigger to go with the MACD 'buy'. The Russell 2000 got a relative strength boost against the Nasdaq, and managed a gain against the S&P. Better stuff from speculative Small Caps, and suggests there is more to this rally than just a simple bounce. Friday will boil down to action at 20-day MAs, but holiday trading could see these ignored in some Black Friday bargain hunting. Next Monday will give a better reflection as to how this rally is shaping up. Have a great Thanksgiving! --- Follow Me on Twitter Dr. Declan Fallon is the Senior Market Technician and Community Director

Daily Market Commentary: Low Volume Consolidation

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It was going to be hard for bulls to push another day like yesterday, so a consolidation near yesterday's highs was adequate compensation. The S&P almost scrapped a point gain, but the 20-day MA took another step lower to meet it. Technicals improved, although On-Balance-Volume is experiencing whipsaw. The Nasdaq experienced a similar day to the S&P.  Technicals are also improving; a MACD and On-Balance-Volume 'buy' trigger are likely tomorrow - assuming no major loss. Such a 'buy' would not preclude a retest of the low, but it would suggest a more trade-worthy low is in place (and the retest would be a buying opportunity). The Russell 2000 completed the trifecta index gain, but technically it's not as well placed as the other indices, and is underperforming relative to the Nasdaq and S&P. Tomorrow could see more of the same, with 20-day MAs overhead to provide resistance.  The retest would be welcome as it would help firm up the swi

$EPAM Systems - The Next $1 Billion Company

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My fundamental take on EPAM Systems is available here .  The technical picture shows a fresh breakout on decent volume, for an illiquid stock. Stops can go on a loss of $18.50. The projected target is $25. 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 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. Zignals offers a full suite of FREE financial services including price and fundamental stock alerts , stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager , active stock

Daily Market Commentary: Early Start to Rally?

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Big gains, but not much volume, opened the week brightly. It's a good start for a swing low, although this will require a decent test over the coming days. The S&P was able to close above it 200-day MA, but technicals didn't manage much improvement.  Can Large Caps lead out? The S&P is showing a relative gain against the Russell 2000, and will soon take out its relative reaction high from July; making it an index leader The Nasdaq enjoyed a more powerful 1-day rally, but it's a long way from even its 20-day MA, let alone the 200-day MA. The 20-day MA will be its next resistance test. The Russell 2000 finished the day with a 'Death Cross'. despite the rally. There was a slight improvement in technicals, but supply can be expected to kick in at its 20-day MA. Tomorrow will probably see some easing, but a swing low test will be need to confirm a market bottom. --- Follow Me on Twitter Dr. Declan Fallon is the Senior Market Technician a

Weekly Market Commentary: Breadth Still Not At Low

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Despite adding to existing longs  of my investment holdings (my trading account is decimated!), it's still looking a little early for a breadth swing low.  However, I didn't want to get caught on the wrong side of a 'Santa Rally' (should it come), so thought Friday was a good day to add to longs. The Percentage of Nasdaq Stocks has dipped into swing low territory, but it's typically the first breadth indicator to reach a bottom. But the Nasdaq Bullish Percents are still some way off. Technicals are not oversold either. Strong swing lows  come in the sub-30% area, with minor swing lows possible in the current range. The Nasdaq Summation Index is getting close, but technicals are still some way from a bottom. I usually look for swing lows from -800 and lower, but it's conceivable a bottom could develop here. The Nasdaq is trading inside a band of support running between 2,800 and 2,865.  The rising trendline of wedge support is also available on t

Daily Market Commentary: Selling Hits Hard

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There was simply no hiding today. The Russell 2000 took the brunt of the selling, dropping 2% and finishing near the low of the day.  Other indices were similarly hit, but none to the same extent as Small Caps. Volume rose in a confirmed distribution day. The S&P was notable as it gave up 200-day MA support. The Russell 2000 is just ugly. Support at 765 is next. The Nasdaq is furthest from 200-day MA support. It finished the day with a 'Death Cross' between 20-day and 200-day MAs. While it hasn't done so yet, the semiconductors have struggled, but there hasn't been a break of the October swing low.  Relative strength has been good, but there is much work to do before it can take on a role as recovery-leader. Today's selling will offer some short term floor, but it may still too early to call a swing low.  On the positive front, semiconductors haven't been as weak as other indices, which suggests a Tech recovery is not far off. --- Fol

Daily Market Commentary: Selling Pressure Remains

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Today's close left markets in a position where they look ready to move lower. Today's losses were light, but tomorrow or Thursday could be damaging. The S&P was unable to hold its 200-day MA, after early trading had placed the index above this key moving average. The Nasdaq gapped lower, and its early rally did enough to close the gap, but little more.  The 20-day MA is about to cross below its 200-day MA, when it does, it will play as resistance on any subsequent rally. The Russell 2000 is perhaps the index most vulnerable to further selling. In a decline, speculative stocks are more likely to suffer heavier selling. As this decline intensifies, Small Caps will find themselves at the sharp end of the sell off.  Tomorrow could be a hard day for the index. If you are on the bull side of the fence, you will be looking for a strong opening hour to define the trend for the rest of the day. But bears hold the edge. --- Follow Me on Twitter Dr. Declan Fa

Daily Market Commentary: Low Volume Consolidation

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Light trading over the Veteran's day holiday did little to change the broader picture. The S&P remained at its 200-day MA, generating what looks like a whipsaw signal for on-balance-volume. The S&P remains the last of the key indices to hold this moving average, it will be a difficult task for it to hold in such light. The Nasdaq posted a small loss, but it looks ready to make another leg lower. While the Russell 2000 will be looking for support around 760. It currently trades around a minor support level of 795. Today's trading was clouded somewhat by the holiday.  Tomorrow will give a clearer picture as to what the week holds. Breadth does not suggest a significant swing low is in play, but a relief rally is well within the realms of possibility. --- 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 markets which can be Prev

Payment Processor on the Rise: $JKHY

This week's post covers Jack Henry and Associates: JKHY . Follow Me on Twitter

Weekly Market Commentary: Breadth Takes Another Step Lower

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After a brief respite, marker breadth took another leg lower. Breadth losses were not small, but breadth indices haven't yet made it to oversold territory. This suggests more downside is to come. The Percentage of Nasdaq Stocks above the 50-day MA fell to 27%.  Stochastics are close to oversold, but they aren't quite there yet. Another week of downside would probably be enough to see technicals oversold, but there is probably still 2-3 weeks of breadth loss required before the breadth index itself is oversold. The Nasdaq Bullish Percents are the most overbought. Stochastics are caught in neutral territory, but trending lower.  The MACD closed the week with a 'sell' trigger. but the Bullish Percents index is still above 50%; strong swing lows kick in sub-10%, but tradeable swing lows usually need a sub-50% value. The Nasdaq Summation Index is another index which hasn't reached swing low territory.  For this index, a sub -800 rating is usually good enough

Daily Market Commentary: Ugliness Continues

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Whatever offerings 200-day MAs could give to bulls, were not enough to tempt buyers.  Markets continued their slide as the Russell 2000 followed the Nasdaq and Nasdaq 100 through its 200-day MA. Selling volume eased, which may reflect an oversell on Wednesday's distribution, but it's going to be hard to build enthusiasm for long term positions.  Seasonal factors may yet prevail, and 'Santa' has plenty of time to make an appearance. Today wouldn't be a bad place to start, but any early steps towards a rally are likely to be tentative. Reasons why 'now' may still be too early for a bottom come from breadth indicators.  The Nasdaq Summation Index, Bullish Percents and Percentage of Stocks above the 50-day MA are all trending lower, but not all have reached areas which typically define swing lows for the parent index.  The Bullish Percents ($BPCOMPQ), in particular, look 'too bullish' to suggest all the weak hands have left the building. Friday

Daily Market Commentary: Bye Bye Nasdaq 200-Day MA

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It looks like Markets decided to take a leaf out of 2008 and sell off after Obamas' (re-)election. The damage was extensive, and any tip-toeing around support was quickly blown away.  Not surprisingly, the day ranked as a confirmed distribution day given the level of point loss. The Nasdaq showed the gap loss at its worst. That MACD trigger 'buy' won't be happening tomorrow! Also, the On-Balance-Volume 'buy' was negated too. The Russell 2000 finished the day closest to its 200-day MA.  Bulls may want to pay attention to this tomorrow (807.23). The S&P hasn't yet dropped to its 200-day MA. It may yet see a test tomorrow, although the Russell 2000 probably offers the lower risk play. In part, because the Dow Jones cracked below its 200-day MA. My sectorbreadth studies suggest the sell off isn't done and markets aren't in a position to develop a strong swing low - yet.  Short term, Russell 2000 and perhaps the S&P offer bu

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