Daily Market Commentary: Mixed Blessings
The day started by exceeding expectations. Shorts trying to fade the gap higher would have struggled, but those playing the afternoon drop may have walked away with a profit. However, some indices finished above resistance (50-day MAs), making it a difficult play to predict for Tuesday.
Today's weak finish suggests a mini-top for the 5-day rally is in place (stops on a break of today's high), with some indices offering short side opportunities.
The S&P had the worst of the action. The index not only failed to hold the break above the 50-day MA, it also failed to hold its breakout. The inverse hammer offers a stop placement at today's high.
The Nasdaq was a little better. It held Friday's break of the 50-day MA and break of resistance, although it closed above former resistance. While it's not offering as good as short opportunity as the S&P, it is offering a short-side play (stop on a break of 3,455).
The Russell 2000 had the best of the action (and is the least suited to a short play) with a solid break of resistance. The index closed near its high and is trading well above the 50-day MA. If the index can clock six days of gains in a row and break 1,000, then a long side opportunity will present itself here.
For Tuesday, an early short opportunity will present itself in the S&P, but if bulls can push the first hour of trading then the Russell 2000 will become the better play (for the longside).
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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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Today's weak finish suggests a mini-top for the 5-day rally is in place (stops on a break of today's high), with some indices offering short side opportunities.
The S&P had the worst of the action. The index not only failed to hold the break above the 50-day MA, it also failed to hold its breakout. The inverse hammer offers a stop placement at today's high.
The Nasdaq was a little better. It held Friday's break of the 50-day MA and break of resistance, although it closed above former resistance. While it's not offering as good as short opportunity as the S&P, it is offering a short-side play (stop on a break of 3,455).
The Russell 2000 had the best of the action (and is the least suited to a short play) with a solid break of resistance. The index closed near its high and is trading well above the 50-day MA. If the index can clock six days of gains in a row and break 1,000, then a long side opportunity will present itself here.
For Tuesday, an early short opportunity will present itself in the S&P, but if bulls can push the first hour of trading then the Russell 2000 will become the better play (for the longside).
All Contributions Welcome - Thank You!
Follow Me on Twitter
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.
JOIN ZIGNALS TODAY - IT'S FREE!
