Monday, March 19, 2012

Market Madness Daily Market Update - 3/19/12

Daily Market Update and Commentary for March 19, 2012

Another day in the green for the major indices today.

The DOW had the weakest showing with a paltry 6.5 point, 0.05% gain to finish at 13239 at the close.
The CBOE Volatility index (VIX) advanced today despite the gains in the SPX with a .57 point, 3.94% move up from its very low levels to close at just over 15.

The S&P 500 had a much better showing than the DOW and was up almost 10 points late in the day before settling down a little to finish at 1409.75. A respectable gain of about 5.5 points, or 0.4%. The index backed off its highs after approaching the top of our ascending wedge formation but it is quickly running out of room and this will resolve one way or another imminently.

Technicals further improved with MACD gaining more ground and the SPX : RUT moving lower once again. A positive for continuing market strength. Stochastics remain in overbought territory on the daily time frame but show no signs of rolling over yet.

Stock market index charts and analysis - SPX

The start of the show today was, of course, the small cap RUT index. We've been increasingly bullish on this index starting after the first week of March (see here, herehere, etc.) and its break today of that stubborn upper channel resistance may bring a new phase to this rally. It should, at the very least, now have a solid base of support around the 830-820 level. For the day the index saw a gain of about 7.5 points, 0.91% to close at 837.77.
A handy outperformance of its major peers.

We love this index under any conditions of continuing overall market strength and it has a high probability of continuing outperformance of its peers under this scenerio.

Stock market index charts and analysis - RUT

The semiconductors (SOX) also performed admirably today with 0.75%, 3.28 point gain to 438.69 at the close. We've been constructive on this index as well lately (here, here) but this one is now sitting right at technical resistance. If, however, it can break convincingly through that 440 mark it too should have some more room to run for relative outperformance. Technicals also saw improvement here today with both MACD and Stochastics registering gains.

Stock market index charts and analysis - SOX

Take care and stay safe out there!

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