Daily Market Commentary: Bullish Engulfing Pattern in S&P on 50-day MA

An important day for the S&P when a successful test of the 50-day MA was combined with a bullish engulfing pattern.  Better still, the index was able to finish above 1,987, a key support level. Technicals are seeping negativity, but not enough to be outright bearish.

The Nasdaq didn't quite make it to 4,485 or the 50-day MA at 4,491, but did find support at whole number resistance at 4,500.  The index is range bound with bearish technicals, but it hasn't yet been cracked on either side.

The Russell 2000 also closed with a bullish engulfing pattern, but didn't make enough ground to regain the channel.

The Dow is challenging what had looked to be an ideal 'bull trap'. It will take a close above 17,351 to entirely negate it, but today was a step in the right direction.

For tomorrow, look for pressured shorts to drive morning gains. but demand buyers will need to step up in the afternoon to maintain the gains.  Shorts will probably be looking at the Semiconductor index and a return to 652 before getting aggressive.


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