Daily Market Commentary: Rally Intact
The long weekend didn't sate bulls appetite for shares and markets continued their advance higher, albeit on lower volume.
Despite the lower volume, there was a resistance breakout for On-Balance-Volume in the S&P. This should maintain support for the rally.
The Nasdaq maintained its consolidation breakout, but it needs a solid gain to put some distance from the consolidation.
The Russell 2000 has no such concerns. Today's gain maintained a run generated by the push above September's swing high. Technicals are running in overbought territory, with the index 10% above its 200-day MA. This is a good time for selling covered calls on existing holdings, with a reversion to mean likely to happen soon.
In the short term, a cooling off period can be expected in the Russell 2000, but this might provide an opportunity for Tech and Large Cap indices to attract buyers and take up some of the running.
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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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Despite the lower volume, there was a resistance breakout for On-Balance-Volume in the S&P. This should maintain support for the rally.
The Nasdaq maintained its consolidation breakout, but it needs a solid gain to put some distance from the consolidation.
The Russell 2000 has no such concerns. Today's gain maintained a run generated by the push above September's swing high. Technicals are running in overbought territory, with the index 10% above its 200-day MA. This is a good time for selling covered calls on existing holdings, with a reversion to mean likely to happen soon.
In the short term, a cooling off period can be expected in the Russell 2000, but this might provide an opportunity for Tech and Large Cap indices to attract buyers and take up some of the running.
---
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 screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own strategy and sell it in the MarketPlace to earn real cash.
You can read what others are saying about Zignals on Investimonials.com.
JOIN ZIGNALS TODAY - IT'S FREE!
