Daily Market Commentary: Decent Attempt By Bulls

Okay, bulls couldn't hold all of their gains by the close of business, but their attempts at breaking the consolidation still have merit.  None of this changes the overbought condition of breadth metrics, but it suggests a mini-rally could emerge before breadth is again in heavily overbought territory.

The S&P managed to edge a break of declining resistance on confirmed accumulation. Bearish technicals remained bearish, but the net technical picture is still bullish.

The Nasdaq hasn't yet managed to follow the action in the S&P, but it won't take much tomorrow to generate a supporting breakout.  Volume also climbed to register an accumulation day.

The semiconductor index also experienced a strong day, although it's questionable whether it managed a breakout. However, if it can take out its last swing high it will offer a stepping stone for the Nasdaq and Nasdaq 100 to push higher.

The Russell 2000 had a tight inside day.  Luckily, it's closer to resistance than support, so there is a chance a strong opening gap on Tuesday could trigger a short covering rally.

Should there be upside gaps on Tuesday, look for the gap-fill to provide longside opportunities. Today's action was bullish enough to hand momentum back to bulls, although breadth metrics suggest any rally will not last very long.


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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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