Market Commentary: Small Caps Rally
Declan Fallon | Aug 22, 2013 02:36PM ET
It was a solid day for bulls as Small Caps took the day's plaudits. The Russell 2000 was able to mount a defense of its 50-day MA, firming the swing low at 1,013. The 20-day MA is overhead to offer resistance, although momentum is with bulls and some follow through is likely. Action in the Nasdaq is likely to help, with a break of the 20-day MA in the latter index probably to occur tomorrow.
The S&P rallied from yesterday's low, but was unable to close above its 50-day MA. The gain in the Russell 2000 should filter through here, but it will likely find the 20-day MA a step too far on the first pass.
The Nasdaq is up at its 20-day MA, enjoying a significant relative advance against the S&P and Russell 2000. Bears have been unable to break the May swing high at 3,532 and a challenge on the 'bull trap' at 3,694 is looking more likely now.
The Russell 2000 may have extended itself a little too much to be an attractive buying opportunity (but is an acceptable hold if long). However, the Nasdaq has a good risk-reward play for a challenge on the 'bull trap' with a stop on a loss of 3,589.
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