Weekly Stock Commentary: Bear rally

One week gains of 9-11% for the indices were of significant relief, but gains of this variety are typically retraced as part of a retest; a retest which could map out for a couple of weeks. It wasn't all fun and games as many support technicals for the indices were either flat or closed lower for the week (unusual). The weak technical picture can be seen in the Russell 2000 as an example:


Market breadth indicators also haven't indicated a bottom; the summation indices have the most room to fall - the Nasdaq is given as an example:


But also breadth indicators like the percentage of stocks above the 50-day MA are not yet oversold.


The week's gains were good, but a bottom is not a slam dunk.

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

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