Daily Market Commentary: Low Volume Gains

Friday had set things up for a positive Monday, and Monday began with a bright start on a strong opening gap, but bulls were unable to build off the open. However, the selling was light and so the overall bullish picture is intact.

The S&P was able to close with a net gain. Technicals are not overbought, which keeps things positive for Tuesday.

The Nasdaq closed with a 'bearish cloud cover' candlestick. This is not the best of omens, but with the breakout holding it's not enough to suggest a significant reversal is in place.

The Russell 2000 was caught in the middle; unable to hold the bulk of the gains, but able to finish above Friday's close. There was also an important relative shift against the Nasdaq; an important return to Small Caps leadership - which is good news for the broader rally.

On simple terms, tomorrow looks like it will be a day of weakness, but those willing to buy will be the ones more likely to benefit in the long term.


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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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