Watch For The Pullback

It’s fairly typical to see profit taking immediately following large up days, especially those with such magnitude like yesterday’s. 94 of the Nasdaq 100 finsihed up. Advancers led decliners almost 6:1!!!

BOUNCE!

Happy Trading.

Market T.A. 6-21-11

Overall the markets seem to be gaining some strength in the near term. All of the indexes have bounced off of their 200 SMA and now have some sort of bullish signs.

The SPX shows a confirmed inverted hammer candle pattern. (bullish)

INDU shows a confirmed inverted hammer. Check out that volume spike last Friday!

RUT has a bullish engulfing pattern.

Nasdaq has a piercing line pattern. Tech will hopefully pick up this week.

Additional confirmation of this bullish technical analysis comes from Monday’s price action on the VIX (Volatility Index) which closed down -1.86 at 21.85 confirming the SPX move. Additionally, breadth on the the NYSE increased to 2.1:1 gainers to losers showing that buyers are stepping back in.

In summary, ALL of this technical analysis is bullish in the short term. The longer term trend direction will be confirmed in 3 weeks during the next earnings season.

Happy trading!