The Nasdaq 100 (^NDX) has completed a rather striking four day reversal pattern and has begun to re-assert the leadership role that was discussed in yesterday's commentary. The two percent advance on the day and the break above the 50-day EMA bodes well for the overall market.



I will be watching the banking index (^BKX) in coming sessions to see whether we can break above the descending trendline through the highs and the 50-day EMA. There are still very strong headwinds for the sector but the chart looks encouraging and there are undoubtedly some fund managers who are starting to put new money to work in the sector.



Traders in London are engaging in some "irrational exuberance" as this is being written and have already celebrated the B of E easing which may be announced later this morning.

The FTSE index powered through the 62% retracement level that was discussed in yesterday's commentary and another one percent has been added so far in today's trading.



Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market. He specializes in market neutral investing and and is currently working on a book about the benefits of trading with long/short strategies, which is scheduled for publication later this year.

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