MARKET COMMENTARY

The market made strong one-day rally. It reversed all the loss suffered in a day earlier. It is my opinion that the rally was led by Russell 2000. In yesterday’s update, I have suspected a brewing strength in bulls, although I did not expected it. The index (RUT) did not fall as much as it should to make it a lasting bear market. Technically, all the indexes are not bullish yet. They are still susceptible to bearish pressure. But we will deal with that later. The imminent issue is the current rally.

It is expected that the rally will continue for Wednesday. But how far it will go is still unknown. The most relevant thing to look at is the resistance areas. For the Dow and S&P, the resistance lines are 11800 and 1320 respectively.

The Russell’s (RUT) resistance is at 720 immediately. Slight above it is 730 which is the 200-day moving average. It is possible that a strong surge on Wednesday could easily take them out. By then, it may break the 60% of RSI which will turn the chart to one which is bullish. If it stalls, then everything remains still. We will need more development to make out the chart.

Yes, we are in a situation of uncertainty as a result of Tuesday’s rally. Now, we need to be vigilant.

DJIA Daily Chart

Russell continues to be my focus. It is the primary cause for the market rally on Tuesday. It is at brink of breaking the resistance.

RUT Daily Chart

The Nasdaq is rather tamed. Despite the bullish actions in other indexes, it remains in the trading range. It is good chart for trading breakouts - either way.

NDX Daily Chart

STOCKS TO WATCH:

NIL

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