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Showing posts from April, 2014

Daily Market Commentary: Dow on the Brink of a Breakout

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It's probably down to the Dow to lead bulls out.  Other indices are too far back to make a difference, and the S&P isn't close enough to suggest it will do the lead out. Volume climbed to register accumulation, a good sign for bulls looking for more. The Dow managed a picture perfect 50-day MA, and now could be at an all-time high by the end of the week.

Daily Market Commentary: Large Caps Continue to Gain

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Solid action from bulls in Large Cap indices keeps the potential breakout in play. The Dow looks more likely to lead out. Volume was down on yesterday, but it will need to pick up if a breakout is to holiday.  Look for a breakout in the coming days.

Daily Market Commentary: Bulls & Bears Exchange Meaty Punches

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After a quiet Easter week, things got a little hot under the collar for both bulls and bears.  Bulls were able to throw the last punch, but the fight is not over. Yesterday saw wide range days, higher volume accumulation in Large Caps, and important defenses of moving averages. Starting with the Large Caps, the S&P and Dow both did well. The Dow edged it with a rebound from its 50-day MA and is angling for a break to new all-time highs. Technicals are net bullish.

Daily Market Commentary: Support Test Monday

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All indices returned to losses. Tech and Small Caps suffered most, Large Caps the least. Losses in the S&P returned the index back to its 20-day MA. Further losses on Monday will set up a potential bearish head-and-shoulder reversal, but buyers have something to work with on Monday.

Daily Market Commentary: Buyers Rally

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It was a rough day with a big gap up, followed by a rapid sell off, then a nearly as quick recovery, before markets drifted lower. But by the end, bulls had done enough to suggest higher prices are in the works. Large Caps remain the indices best positioned to benefit over the long term, with the Nasdaq and Russell 2000 offering day traders the best opportunity to benefit based on intraday volatility. The S&P is nicely positioned to challenge the April peak.  It's also regaining some of the ground it had lost against the Russell 2000 during the April bounce.

Daily Market Commentary: Modest Losses

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The S&P experienced a small loss on lighter volume. After a long series of gains, today's loss was welcome, and doesn't change the larger bullish picture.  Technicals remain bullish, and with the 20-day and 50-day MAs converging, the chance for a retreat and bounce at these MAs remains compelling.

Daily Market Commentary: Sixth Day of Gains for S&P

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The S&P banked another gain while the Dow touched resistance. Percentage gains in the Russell 2000 and Nasdaq were greater than the Dow and S&P, but the outlook for the latter indices looks better. The Dow is nicely positioned to break upside, perhaps by the end of the week. Tuesday registered as an accumulation day, marking good demand from buyers. Bears may try to push their luck tomorrow, but the close proximity of 20-day and 50-day MAs makes any selloff unlikely to hold.

Daily Market Commentary: Scrappy Recovery Continues

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It was never going to look pretty, with indices effectively back inside prior trading ranges, with some wedged between 50-day and 200-day MAs too. Narrow range days, with a net bullish bias, is likely to be the order of the day, at least until 50-day MAs are recovered.  The two indices best positioned to take advantage of bullish strength are the Dow Industrials and S&P. The Dow has morphed into a market leader, with strength in Transports lending weight to a long term bullish setup as per Dow Theory, although neither has cracked new highs - yet. The Dow does look like it will, and possibly soon. Technicals are all net bullish, and Monday's narrow range day suggests few sellers willing to cash out. A break of 16,600 is looking good.

Daily Market Commentary: Nasdaq, Russell 2000 Against Steep Resistance

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Markets kept with the theme of Tuesday's bullish reversal, adding another percentage point in gains as shorts found themselves on the wrong side of the trade. However, the Nasdaq and Russell 2000 now find themselves nestled against channel resistance - although given the steepness of this resistance, it's unlikely to hold for very long.  Aside from further gains, a small loss here could be seen as a victory for bulls, which would set up a challenge of highs from last week's large one-day reversal.  Volume wasn't fantastic, but given the Easter weekend, not unexpected.

Daily Market Commentary: 'Bear Trap' in S&P

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Today's action was much better news for bulls after a wide reversal swing. The S&P managed to inch a 'bear trap', although it will be vulnerable to mild selling tomorrow. On-Balance-Volume ticked to a 'buy' signal, volume climbed in accumulation, but the index finished just shy of its 50-day MA. The upside target is 1,897, risk measured on a loss of 1,814.

Daily Market Commentary: Russell 2000 Finds Support at 200-day MA

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It was a wide range day, but bulls were able to regain some of the mid-afternoon weakness by the close. Intraday weakness for the Russell 2000 found support at the 200-day MA, although the finishing close did not necessarily end bullish. The Russell 2000 also lost relative ground against the Nasdaq after a sustained period of outperformance. It's an opportunity for bulls, although not as bullish as I would like to see.

Weekly Market Commentary: Selling Continues as Volume Eases

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Thursday's sell off got some continuation on Friday, but volume dropped as the number of bailing sellers dropped. All indices now sit inside No-Man's Land of between 50-day and 200-day MAs - where it becomes harder for either side to gain an advantage.  The Russell 2000 will be the first index to test veracity of demand at the 200-day MA as it sits just a few points above this important support level. For the Russell 2000, a push below the 200-day MA would quickly set up for a test of the February swing low. My expectation is for a trading-range style bounce from the February swing low, with the 200-day MA only to provide a brief respite from the selling. Technicals are oversold, which will help bulls, and the Russell 2000 is attempting a stronger recovery relative to the Nasdaq (but not yet to the S&P), which suggests money is prepared to come in at these levels.

Daly Market Commentary: S&P Breakdown

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In relative terms, the S&P has been well ahead of the Russell 2000 and Nasdaq for bullishness, but yesterday was an important victory for bears. The break above the 20-day MA from Wednesday failed to hold, and the resulting move lower was enough to undercut converged ranged support and 50-day MA. To add to the troubles, volume climbed in confirmed distribution.  Finally, supporting technicals all turned net bearish.  If there is a ray of light for bulls, it's that a 2% loss is likely to be followed by some value buying; value buying which may yet lead to a 'bear trap'.

Daily Market Commentary: Sizable Rally But No Volume

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Wednesday's finish offered bulls their day trade opportunity, but the volume wasn't really there to suggest something more than a bear rally.   However, the overall trend remains on the side of the bulls - so bears will need to remain cautious despite the past week's action. However, the S&P did close well above the 20-day MA, in what could have been an attack point for shorts. Resistance at 1,880 is next with the 'bull trap' at 1,898 after that. Technicals are mixed, but stochastics suggest bulls still have control.

Daily Market Commentary: Buyers Return At Support

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The S&P played to form with buyers coming in at converged support and 50-day MA. There was even a morning sell off and recovery for those nimble enough to take advantage. The intraday picture is nicely set up for an upside breakout.  Short term (long) traders might want to take partial profits at 20-day MA, but a larger push to sideways resistance around 1,880 is not out of the question. Risk measured on a close below today's lows.

Daily Market Commentary: Selling Overshoot

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Buyers offered very little on the day, which was somewhat unexpected given large sell offs in recent months have found it hard to gain traction. What happens during the next rally is of greater importance to bears than the extent of this decline - bears need a lower high to suggest there is something more than just a trade of a couple of days. The S&P traded down at March lows, part of a tight consolidation within a broader February-April trading range. Bulls may sniff an opportunity in this index tomorrow, as the March lows also converge perfectly with the 50-day MA. If there is a doubt it's that stochastics are not oversold, which may make any bounce short lived.

Daily Market Commentary: Big Loss Inside Range

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Large losses on weak jobs data offered bears an opportunity to go on the offensive.  The S&P was least affected by Friday's sell off, but still enough to finish the day with a 'bull trap'. There was also a 'sell' trigger in On-Balance-Volume.

Daily Market Commentary: Sellers Pay a Visit

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The swing trade opportunity sided with the bears, but for Large Caps it wasn't a big swing. The S&P maintained its breakout, and could take another loss and remain above breakout support. Technicals are still net bullish, which makes the short play a weak one.

Daily Market Commentary: Dow Preparing for Breakout

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It's looking good for the Dow following yesterday's breakout in the S&P. There was a uptick in technicals with a 'buy' signal in On-Balance-Volume following a recent 'buy' signal in the MACD. Support comes in around 16,450 with the 20-day MA an alternative support level.

Daily Market Commentary: S&P Breakout

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The week continued its bright start with a resistance break for the S&P. Technicals are improving, with the MACD and On-Balance-Volume on the verge of a new 'buy' trigger.  However, there was also a snap-back relative swing against Large Caps and back to Small Caps despite the breakout. Bulls will be gearing up for a measured move; the first target is 1,920.

Daily Market Commentary: Second Time Lucky

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Buyers had laid out the ground rules for Monday's gain on Friday, and they grabbed their opportunity with both hands.  Small Caps had the best of the action (as it had suffered the most at the hands of sellers), pushing itself back above its 50-day MA.   Intermediate slow stochastics [39,1] managed to honor mid-line support as short term stochastics [14,3] generated bullish crossover - a decent 'buy' signal with a stop on a loss of 1,146; a set up similar to November's swing low last year. Take partial profits on a test of the 20-day MA.

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