Higher Volume Gaps Higher

An interesting start to the week. Markets gapped higher off the open and were able to add some distance to their starting points.

The Russell 2000 chalked up a near 2% gain as it makes a run on 1,347.  This was enough to finish the day at the high.  The MACD is still on a 'sell' trigger, but another day like today should be enough to reverse it.

The S&P pegged back some of its gains by the close of business, but it was above its opening price. The gain was enough to reverse the 'sell' trigger in On-Balance-Volume.

The Nasdaq chalked up a 1% gain in a manner similar to the S&P. As an index which had suffered the greatest amount of selling last week, it still has some way to go to before it makes it back to 5,403.

For tomorrow, look for challenges on new 52-week (all-time) highs. If markets can push above it will have the makings of the seasonal 'Santa rally'.

You've now read my opinion, next read Douglas' blog.

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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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