It was going to happen at some point, but sellers made an appearance after a strong upward swing from the November swing low. Resistance played out at the 50-day MA, but selling volume was below average, and below Friday's higher volume accumulation.  Technicals also turned net bullish by the close of business. It was a similar story for the Nasdaq. Technicals also turned net bullish. Helping out the Nasdaq was the net bullish turn in the Percentage of Nasdaq Stocks trading above the 50-day MA.  This breadth index is usually the first to turn bullish, but the rally for November is substantial, increasing the probability for a decent Santa Rally. The Russell 2000 also experienced net bullish technicals. Like the S&P and Nasdaq, it encountered resistance at its 50-day MA; but this resistance also corresponded to horizontal resistance.  As a result, there may be more selling pressure for this index than for the aforementioned indices. I'm still lik...

The swing low in the market firmed up with a strong advance off an oversold breadth state. In the case of the Nasdaq, breadth moved from oversold into a neutral state, but continued the advance higher. Breadth has plenty of room to run before it turns overbought. However, the Santa Rally may not last long into the New Year, as the NYSE 52-week low is well away from a typical strong swing low. The index to watch over the course of the Santa Rally is the Russell 2000.  The recent breakdown reversed into a 'bear trap', and is ready to challenge 868 resistance for a third time (lucky!).  Small Caps have had a quiet 2012, so 2013 could be their year. The S&P also is working off a bear trap, and is in the process of completing a higher swing low - and perhaps - a new, higher swing high. While the Nasdaq is range bound, but a move to challenge 3,196 should be supported, given the relative position of breadth metrics. The Fiscal Cliff is a distraction, ...

It was another good day for indices.  Volume climbed in a confirmed accumulation day, following through on yesterday's recovery. This keeps the November rally intact, and nicely sets up the 'Santa Rally'. The Russell 2000 managed an upside breakout from its channel.  This coincided with a close above the 50-day MA. Technicals also improved, with the Directional Movement Index the only indicator to fall shy of a bullish turn.  Small Caps are outperforming the Tech indices. The Nasdaq continued its advance, but it didn't make it to its 50-day MA. The S&P finished just shy of its 50-day MA, but given action in the Russell 2000, it should have enough buying juice to see an upside break.  However, relative strength continued to weaken against the Small Cap index. Tomorrow might not be the day, but this rally looks good to see a push above respective 50-day MAs. The 'Santa Rally' is in play. --- Follow Me on Twitter Dr. Declan Fallon is t...

After an opening sell off, markets were able to stage a strong recovery to finish the day near the highs. Volume was below yesterday's, but the end day gain was of greater importance. The S&P was able to mount a successful defense of its 200-day MA, but technicals aren't yet net bullish. The 50-day MA is the overhead target. Relative strength remained in Small Caps favour The Russell 2000 finished at channel resistance, but not before putting some distance from its 200-day MA. As with the S&P, the 50-day MA is overhead resistance. The Nasdaq managed to overcome the rebound off the 200-day MA, and it was able to finish a shade above its 200-day MA. The next upside target is its 50-day MA. Today's finish sets up for a move to 50-day MAs.  Ideally, it would have been good to have seen some higher volume accumulation, but there is probably enough to see some upside follow through tomorrow. --- Follow Me on Twitter Dr. Declan Fallon is the Senio...

There was no great loss in percentage terms, but there was higher volume distribution, which offers some uncertainty going forwards. The S&P is seeing pressure in on-balance-volume (which has effectively flat-lined) to switch negative. While Slow Stochastics is about to switch positive. Bulls will be looking at the 200-day MA for support. Bears will want to attack the 50-day MA. But the next few days could be scrappy. The Nasdaq was repelled by its 200-day MA. Shorts will have an easier time playing against the 200-day MA than waiting for the S&P to get to its 50-day MA. The Russell 2000 had managed to push above its 200-day MA, but finished the day with the index at its 200-day MA. This could swing either way, although improving technicals suggests bulls will reassert themselves, but it may see a temporary drop below this average given the sharp gains in recent days. Wednesday could see today's losses expand, given the sequence of gains posted up until tod...

The first day of the post-Thanksgiving holiday saw respectable trading. There was a continued shift away from defensive Large Caps towards more speculative (and bullish) Small Caps. There was also breadth gains in line with a potential swing low for the Nasdaq. The S&P is just shy of a net bullish turn in technicals (stochastics and ADX left to turn).  The 50-day MA is just under 20 points away, which may take a couple of days to get there. The Nasdaq had the best of the day's action, generating a sharp relative gain against the S&P. Technicals may turn net bullish tomorrow, offering further opportunity to build on last week's channel breakout. But the 200-day MA will offer a point of resistance, and a potential attack area for shorts. Helping firm the swing low in the Nasdaq was the improved breadth measure. The Percentage of Nasdaq Stocks above the 50-day MA typically lead the reversal.  This has moved from just 18% of Nasdaq stocks above their 50-day MA,...

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