Bulls give an inclination of the pressure they are exerting on the market, although the jump out of the gates at the start of the day wasn't built on. The Russell 2000 remained the lead index with a respectable gain, but there was no advance on the morning gap. The Nasdaq popped its head over the 5-day consolidation resistance, with On-Balance-Volume returning to a 'buy' trigger, although the volume trend remains bearish. The S&P also cleared its consolidation on higher volume accumulation. Technical strength remains good, even if relative strength clearly shows the index as a laggard. Will Friday deliver the bullish follow through? Today marked breakouts for the key indices, but there is a risk of 'false breakouts', particularly if indices are pushed back into the prior 5-day consolidation.  A break of the 6-day low for any of the aforementioned indices would mark a confirmed 'false breakout' and offer a short play. --- Follow Me on

If you are a bull, the past week's action has been very kind.  Tight action, over an extended period, favors a big reaction move.  The resulting move should come in the direction of the prior trend, which in this case is bullish. New longs can look to place a stop below the 5-day low.  Aggressive players may wish to play a short on the break of the 5-day low as it would mark a 'fake out' of the bullish thesis (stops coming in above the 5-day high in this case). The S&P shows the bullish flag which 'should' break higher.  Technicals are bullish (with the exception of On-Balance-Volume, although this is likely to turn bullish on the next up day). Notice how the breakout gap in the Nasdaq hasn't been violated; another bullish sign.  The only ugly is down trending On-Balance-Volume. While the Russell 2000 is pressuring its high even within the tight consolidation.  Look for this index to lead out the others. For Thursday, keep an eye on the Russ

A further day of selling offered relatively small losses for key indices.  Markets were able to make back some of the ground lost in morning trading, reflecting continued interest on the part of buyers (even on a down day).  The Russell 2000 remained the most resilient to the selling, shedding just over 0.10%.  Its breakout remains intact with all supporting technicals in the green.  It's the index of choice for longs. On the other side of the coin was the semiconductor index. Here, there was concerted action on the part of sellers to take the index back to support.  Although, there was a fresh 'Golden Cross' between 20-day and 200-day MAs.  Today's close does offer an aggressive long, with an alternative entry level at the fast rising 20-day MA. The damage in the semiconductor index was reflected in the Nasdaq and Nasdaq 100.  The Nasdaq 100 also generated a 'Golden Cross' between 20-day and 200-day MAs and is sitting at a support level.  Again, it of

Friday's gains were offset by Monday's low volume decline. The damage was relatively limited, although markets remain primed for further weakness. The S&P is well above declining resistance, turned support, although On-Balance-Volume again switched to a 'sell' trigger. The Nasdaq is still protecting the large breakout gap.  Although it's struggling a little to reverse the downward trend for On-Balance-Volume. While the Russell 2000 traded in a very narrow intraday range.  This is looking very bullish. For Tuesday, watch for further consolidation.  Beware of a big sell off in the first hour, because this could instill fear in the market, and lead to a bigger push into the breakout gaps. --- Follow Me on Twitter Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com . I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also vi

It was a good week for the indices, with the fiscal cliff nonsense resolving in bulls favor. The Russell 2000 was the star of the week as it made new multi-year highs. It handily cleared resistance on a net bullish turn in technicals. Bulls will want 868 to hold as end-of-week support if this is a valid breakout. The Percentage of Nasdaq Stocks above 50-day MA is in overbought territory, although this rarely signals an absolute top, it does suggest those looking to buy are best to wait for the next pull back. Technically, this breadth metric turned net bullish. The Nasdaq Bullish Percents also finished the week net bullish (in technicals).  However, it is someway from overbought territory, which bodes well for a continuation of this rally (with the Percentage of Nasdaq Stocks above the 50-day MA marking a temporary swing high of a larger move). It was the same for the Nasdaq Summation Index, which is neither overbought directly, or technically. Again,  this favors furthe

Bulls can be satisfied with yesterday's action. Markets were able to hold their big gains and what selling there was, turned out to be very light. The S&P did see a technical change with an On-Balance-Volume 'sell', and after a recent upswing in buying, it will be important this doesn't morph into a new downward trend. The breakout gap is a big void which traders will try and fill.  True 'Breakout Gaps' never fill, so while a violation of the gap is allowable, it shouldn't be allowed break below Monday's close, and ideally, hold above 3,050. The real winner is still the Russell 2000. A successful back-test of 868 would be very bullish. For Friday, look for more consolidation action. Although the next leg up will probably be a big one as what sideline money is out there is likely anticipating a higher move, particularly for the Russell 2000. --- Follow Me on Twitter Dr. Declan Fallon is the Senior Market Technician and Commu

A second big day of buying pushed markets well beyond resistance, but left markets exposed in the short term.  Traders looking for a sustainable rally would ideally like to see some low key action which held close to yesterday's highs. Technicals sharply improved, and any developing weakness from last week was reversed. The S&P pushed the boundaries of its consolidation on a fresh MACD trigger 'buy'.  However, larger gains in the Russell 2000 further diverged the relative relationship between Small and Large Caps; but this spreading relationship is net bullish for the market as a whole (because more money is flowing into speculative versus defensive stocks). The Russell 2000 broke clear of the September swing high in very bullish action.  The rising trend is nicely aligned with the fastest moving average (20-day MA) above the next fastest (50-day MA) and long term moving average (200-day MA); all of which are rising.  Small Caps are also showing their leadership