Saturday, October 24, 2009

Weekly Stock Market Commentary: Tiring Rally

Although it has been a couple of weeks since the last weekly commentary there has been very little change in the state of play.

For the S&P, overbought stochastics are about to meet a MACD trigger 'sell'. A similar event in early 2007 did not bring an immediate top but selling then marked a reasonable exit given the events which followed.


The Nasdaq is still going strong - as is the March 30th 'Buy' signal - but the same pressures at play in the S&P apply here.


The Nasdaq 100 pushed above converged resistance with 2008 highs the next port of call:


But sentiment remains firmly in the bear camp. The percentage of Nasdaq stocks above the 50-day MA has been on a 'sell' trigger since July 2nd


And the Summation Index since July 10th


With the Russell 2000 the only index struggling against resistance.


The actual top may not be far in terms of price, but the time factor could see another 6-9 months of bullish bias. Hard to be a buyer but existing holders might find it hard to let go.


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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