Daily Market Commentary: Contained Rally

Disappointing action after bulls attempted to build on Friday's stall in the decline. The Russell 2000 had the best of the action as it suggested a breakout from the bullish flag.  Bulls could look to buy with a stop on a loss of Friday's low. The next challenge is to clear declining resistance connecting March and June swing highs.


The Nasdaq finished with a bullish engulfing pattern, although with stochastics overbought the importance of the pattern is weakened. However, there is a good argument for a bullish flag, with potential breakout opportunity tomorrow if bulls can maintain today's buying.


Finally, the S&P did very little, although it did manage to sneak an accumulation day.  There isn't much of a pattern shaping up in the index at the moment, other than a probable test of the 20-day MA.


For tomorrow, look for some follow through in the Russell 2000 and a 'bull flag' breakout in the Nasdaq.

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