Tuesday, December 04, 2012

Daily Market Commentary: Mixed Losses

Tough to know what to make of today.  On a relative scale, losses were light, but volume was higher - marking confirmed distribution. The broader 'Santa Rally' remains in good health, and the two days of losses are part of a rebuff from 50-day MAs. Technicals also remain positive.

The S&P is caught between its 50-day and 200-day MA, and losses are on course to shape a swing low at either the 20-day or 200-day MA.

How the 200-day MA can play as support will first be determined by the Nasdaq.  It finished the day at 200-day MA, so if buyers are going to view it as support, then they will need to step in soon - if not tomorrow.

But the index best placed to gain, and the index which performed best today, is the Russell 2000.  The index is holding the 50-day MA support and outperforming both the Nasdaq and S&P.  Technicals are also getting stronger.

Purveyors of the Santa Rally will want to keep an eye on the Russell 2000, it still looks like it will be the index to lead into the New Year.


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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.

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