It was left to Large Caps to do the heavy lifting today. The Dow Jones Index was today’s winner as it added over 1% on heavy volume accumulation. The index is still experiencing relative underperformance to Tech indices, but the gain marks a new swing high and an opportunity for momentum traders to get involved with some more defensive stocks.
The Nasdaq finished the day with a black candlestick – often a reversal candlestick when it appears at the end of the rally, so we need to watch for a gap down tomorrow. Volume was lighter than yesterday but technicals are bullish. A close above the highs of today would negate the bearishness of the individual candlestick.
The Russell 2000 is back holding breakout support which is also its 20-day MA. Volume was well down on recent trading days but the action is probably enough to consider it a pullback ‘buy’.
The day finished with momentum traders pushing money into Large Cap stocks as more speculative issues saw a pause in the buying. Too early to say if there is a more concerted effort to rotate money into more defensive stocks but today was a start.
You’ve now read my opinion, next read Douglas’ blog.
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SOURCE: Fallon Financial Commentary – Read entire story here.