Daily Market Commentary: Light Trading Action

Bulls can be satisfied with yesterday's action. Markets were able to hold their big gains and what selling there was, turned out to be very light.

The S&P did see a technical change with an On-Balance-Volume 'sell', and after a recent upswing in buying, it will be important this doesn't morph into a new downward trend.

The breakout gap is a big void which traders will try and fill.  True 'Breakout Gaps' never fill, so while a violation of the gap is allowable, it shouldn't be allowed break below Monday's close, and ideally, hold above 3,050.

The real winner is still the Russell 2000. A successful back-test of 868 would be very bullish.

For Friday, look for more consolidation action. Although the next leg up will probably be a big one as what sideline money is out there is likely anticipating a higher move, particularly for the Russell 2000.


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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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