Daily Market Commentary: Modest Gains

The good news is that Friday's gains held up. The bad news, is little more was added to those gains.

Today's highs in the S&P didn't take out the all-time high, but there was a relative swing in favour of Large Caps over Small Caps.

The relative shift away from Small Caps was because of a small loss in the Russell 2000 today. Nothing game changing, but a small divergence relative to Small Caps and Tech. Bulls should be patient for a retest of highs, which will see small losses on the way there.

The Nasdaq pushed above 4,070 intraday, but closed the day below this key price level. Shorts could use today's highs as a risk metric for a short position, although it would be swimming against the broader bullish trend.

The semiconductor index is also an index to watch. It gapped higher on Friday, and added a single point today. More importantly, the break of 509 holds on good technical strength.  This is good news for Tech averages, and weakens the premise for a short play in the Nasdaq.

In summary, the Nasdaq offers a potential short position. Large Caps may also consider short positions on today's close. Longs can look to the Russell 2000 to retest the recent swing high.


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