Daily Market Commentary: Small Caps Advance

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.

The S&P also had a moment in the sun by breaking the boundary of the rising channel.  The upside channel break accelerates the rate of the advance, although makes it more vulnerable to a sharp reversal - but the net effect is more bullish than bearish. Technicals are in good shape too.

The Nasdaq had its own good day, registering an accumulation day as had the S&P. The sharp shift in relative strength from Large Caps to Technology stocks took a modest retreat, but remains strongly in Technologies favour.

Today kept the bullish momentum rolling, with a good opportunity for more to follow.


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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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