Daily Market Commentary: S&P Attempting to Break

Large Caps are stealing attention from more speculative Small Caps and Technology Indices.  The declining relative trend between the S&P and Russell 2000, which has been in play since November, is swinging back in favour of the S&P. The S&P has also managed a new closing high.

The Nasdaq also managed gains, but didn't take out yesterday highs. The On-Balance-Volume 'sell' signal switched back in favour of bull as it attempts to ride the moving average as support. Although it's the narrowing (bearish) wedge which is dominant here.

The Russell 2000 experienced a smaller gain.  Like the S&P it's trying to roll higher. Bearish technicals haven't reversed yet.

It was a good day for bulls. The day finished in a manner which suggested it could enjoy some upside follow through tomorrow. The intermediate term outlook (3 weeks out or so) is still bearish; breadth indicators will need to reverse the more established bearish paths if there is confidence for something more than a quick rally out of this.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. You can read what others are saying about Zignals on Investimonials.com.

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