Weekly Market Commentary: Breadth Top

Modest losses on the week for the indices weren't enough to prevent a bullish cross of long term momentum (stochastics [39,1]) for the Nasdaq and Nasdaq 100.


On the other side of the fence, market breadth had taken a marked turn to the downside. MACD trigger 'sells' for the Percentage of Nasdaq and S&P stocks above the 50-day MA. The rally is currently been supported by fewer and fewer stocks above their 50-day MAs.



Summation Indices also marked the week with a new reaction low.



However, over the course of a bull market such divergences were not uncommon and the bulk of the last cyclical bull market operated under a negative divergence between breadth and the parent market. How these conditions play out in a cyclical bear market will be made clearer over the coming week but it's a clear warning sign the best of the rally is behind it for now.

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[1] Register at Zignals.
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Good luck!


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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