Positive Start to Week

The Russell 2000 led the market out with a 1%+ gain as relative performance continued to gain ground; the next phase of the Small gap rally is well underway. This is good news for bulls looking for gains to continue throughout the summer.

It was a little more muted for the S&P. Volume was light and 2016 highs haven't been broken yet, but Friday's loss was reversed. The Head-and-Shoulder pattern looks well and truly cooked.

The Nasdaq almost closed above 2016 highs. Shorts may think this is a low risk opportunity, but given action in the Russell 2000 I suspect this will head higher.

The Semiconductor Index had looked bearish on Friday, and Monday followed through on this. It wasn't a big loss, but there may be more follow through in the morning session.

For tomorrow, look for more of the same - gains in lead indices and Russell 2000 in particular, losses in Semiconductors.

You've now read my opinion, next read Douglas' and Jani's.

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Dr. Declan Fallon is the Senior Market Technician for ChartDNA.com, and Product Development Manager for FirstDerivatives.com. I also trade on eToro and can be copied for free.

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