Sunday, May 03, 2009

Weekly Stock Market Commentary: Resistance tested

An interesting week. The Nasdaq fell 6 points shy of the 2004 reaction low and is rich in the short term. However, long term stochastics have yet to cross the mid-line so this particular rally isn't done yet.


Also working in its favour is the push towards 2006 reaction lows for the Nasdaq 100 - the Nasdaq 100 having surpassed its 2004 reaction low some weeks ago.


The Nasdaq Bullish Percent Index is a few points from the bull market reversal zone. Suffice to say, technicals are heavily overbought.


Especially the Percentage of Nasdaq stocks above the 50-day MA; this is well above 5-year highs


The NYSE is showing similar extremes; below is the Summation Index:


Although the S&P has only just reached bear market resistance in its Bullish Percent Index; Large Caps aren't out of the woods the same way Tech has managed over the past weeks.


Tech markets are looking rosy, even if in the short term it would be hard to be a buyer. Large caps will eventually be dragged up but the Bullish Percent index for the S&P suggests a reversal point has been breached.

There will be no Stockcharts.com Publisher review this week because of the Irish bank holiday Monday.

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.
 
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