Daily Market Commentary: No Late Buying

The day set up nicely for an afternoon follow through by bulls, but it never arrived.  However, bulls did manage to do enough to set up a follow through for tomorrow. Bulls could push this from the off in morning trading; if so, a break of Wednesday's lows can be used for stops.

The S&P is nicely poised for gains. The MACD is ready to bounce despite the negative cross, and On-Balance-Volume is about to trigger a 'buy'. It looks a relative low risk play on the long side for a push to new highs. But be prepared if lows are taken out quickly.

The Nasdaq was able to post a small gain, and it may be the index to post new highs first. Volume registered as accumulation day as On-Balance-Volume returned a 'buy' trigger. A push above 4,178 could see gains accelerate. Longside risk is measured by a loss of 4,103.

The Russell 2000 is in a similar predicament to the S&P, although it has a clearer support level of 1,147 to work off. Longs favoured.

The big winner on the day was the semiconductor index. A solid gap move higher has put it at new highs on renewed technical strength. Look for further highs, which will help the Nasdaq and Nasdaq 100.

Going forward, Tech may offer the most upside, but the S&P and Russell 2000 are offering the lower risk entry in the near term. Losses taking out Monday's lows would muddy the water considerably, as today offered a clear bullish tone. It would be hard for potential investors to get excited if things turned south from here.


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