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Showing posts from May, 2013

Daily Market Commentary: S&P 'Bull Trap' Intact

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Despite missing a couple of days of action, the 'Bull Trap' which emerged in the S&P last week was still in play by today's close.  The two attempts at a rally in the past few days were rebuffed by the close: 1,687 is looking increasingly like a swing high top, and a good place to measure risk:reward if looking to go short.  The MACD has already triggered a 'sell'.

Weekly Market Commentary: (Another) Reversal From 52-Week Highs

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Last week, the number of 52-week Highs / Lows in the Nasdaq and NYSE flashed a new peak and reversed by weeks end. The peak in the NYSE New Highs / Lows was more prominent than the Nasdaq, although the last peak didn't result in a consolidation/decline. However, the chances are high that this peak will lead to a consolidation/decline, and this will remain in play until the next swing low (peak in 52-week Lows). Taking Profits should be the focus until the worst of the decline plays out.

Daily Market Commentary: S&P Bull Trap

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Today's losses were small, but enough to leave a 'Bull Trap' in the S&P. It was the only real action of note on the day.  Lower volume kept this from being a distribution day. The S&P came close to a test of the 20-day MA with a pending bear cross in the MACD and On-Balance-Volume. There was also a relative shift against the Russell 2000, which is better news for bulls as defense of Small Caps outweighed that of Large Caps.

Daily Market Commentary: Nasdaq Breaks Support

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It has taken over a month for sellers to mount a high volume challenge, but today was one such day.  In terms of total volume, it was one of the worst days for 2013. And in the context of the rally, it offers a sign for a potential swing high, but doesn't break the larger bullish trend - it will take much more selling to do that. The Nasdaq did lose the tightly ascending support line established from the April swing low.  A move to the 20-day MA looks most likely.

Daily Market Commentary: Small Gain Accumulation

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The gains were small.  The volume greater.  The rally ticks along.  There is little more to say than that...

Daily Market Commentary: Low Volume Losses

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The mini-rally started in mid-April continued to rule the roost. Today's low volume losses continued with the trend which has supported the rally: namely high volume gains, and low volume losses. The S&P sits 12% above its 200-day MA, which is unusually high. Although the S&P has managed to rally to 20% above its 200-day MA; typically this is done after a major low, and not at the latter stages of an advance. Neither action in the indices or supporting technicals suggest this rally is about to end soon.

Stock Picks: $AMBA, $VECO, $CREE, $FTK, $MW, $CCC, $BYI

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Daily Market Commentary: Distribution

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Not surprising given the gains in recent weeks, but sellers made their presence felt on higher volume. The good news was there was no real damage done to the trend, and technicals remain buoyant. The S&P kept its nose above the rising channel. An undercut would set this up for a move back to channel support.

Daily Market Commentary: Small Caps Advance

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Small Caps got a key uptick against the Nasdaq after two months of underperformance, although the Russell 2000 continued to lag against the S&P. However, today was important day for re-establishing the importance of Small Caps as a component of the broader rally. No rally can sustain itself for long periods without the participation of the Russell 2000.

Daily Market Commentary: Modest Uptick

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No great movement or volume, but at least the push was higher.  The S&P continued to track along upper channel resistance.  Technicals still in good shape despite overbought stochastics.

Weekly Market Commentary: Double Top in New Highs? Probably Not

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Unusual behavior in New Highs / New Lows.  After what looked to have been a fairly reliable peak in the number of (smoothed) NYSE components at new 52-week highs, now looks set to make an even higher high. Given the last peak was a 10-year high, it's odd to see this challenged so soon. However, it does point to the overall strength of the rally to have so many components making new high - a total contrast to the action in the 2007 top.  The current situation has far more in common with peaks in 2004 and 2010, which marked consolidation points of larger rallies

Daily Market Commentary: Channel Resistance

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Modest losses were not unexpected given the sequence of gains. The S&P made a pitch perfect rebuttal off channel resistance.  Bulls may try and repeat the action of January and February, when the index bounced along the upper resistance line.

Daily Market Commentary: Small Caps Gain

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After pushing a breakout yesterday, today saw the Russell 2000 build on this momentum.  The advance helped push its relative advance against the Nasdaq, but it will take a number of days before the broader trend in relative strength changes.

Daily Market Commentary: Small Caps Breakout

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Bulls kept things moving, although in my  sectorbreadth  analysis, the once strong Utility sector took a big hit to fall to (joint) last spot.  The Russell 2000 finally posted its breakout. This didn't really change the relative underperformance of the index to the Nasdaq, but there was a gain against the S&P.  However, it did manage to reverse the brief 'Death Cross'.

Weekly Market Commentary: Rally Expands

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Market Breadth accelerated higher, firming up the swing low and supporting the current leg of the rally. The swing low emerged from relative strength - not from an oversold state - as is typical at major lows. So while the Percentage of Nasdaq Stocks above the 50-day MA has room to run before it becomes overbought, the Nasdaq Bullish Percents and Nasdaq Summation Index will be soon be in overbought territory once more.

Daily Market Commentary: Technology Indices Advance

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Yesterday's selling had put pressure on Technology indices, and today they responded.  Buyers stepped in to take the Nasdaq and Nasdaq 100 away from breakout support, postponing the possibility for a 'bull trap'.

Daily Market Commentary: Extensive Selling of Small Cap Stocks

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A worrying sell off in Small Cap stocks overshadowed the selling in other indices.  The Russell 2000 experienced over a 2% sell off, cutting below 20-day and 50-day MAs in the process. However, the February and April swing lows likely mark the boundary of a trading range.  This lessens the significance of today's selling, although you still don't want to see it! The selling did result in a bear trigger in the ADX and increased the relative loss against other indices; this has been particularly ugly against the Nasdaq. Despite a trading range in the Russell 2000, the big relative swing against Small Caps is undermining the April rally. Without participation of Small Caps, the broader rally will struggle for long term traction.  What would add to the misery is if the breakouts in the Tech averages would fail (and they are close to it).

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