Weekly Market Comentary: Nasdaq Summation Index Bottom?
($SPX)
via StockCharts.com
The Nasdaq similarly drifted below the bullish mid-line (50) of stochastics as it looked to garner support. The first fibonacci support level at 2,050 is still some 250 points below; so it is a little early to be calling a bottom. Volume was disappointing.
Nasdaq
via StockCharts.com
The one key aspect working in its favour is the picture perfect support bounce in the Nasdaq Summation Index from the broadening wedge; support working off a reaction bottom of -777 (below my unofficial -600 'buy' trigger line). Additional support found in stochastics - watch for a confirmed 'buy' soon.
($NASI)
via StockCharts.com
The Percentage of Nasdaq Stocks above the 50-day MA also rallied to suggest a reaction low in the market - although techicals are short of a confirmed 'buy'.
($NAA50R)
via StockCharts.com
The same was true for the Percentage of S&P Stocks above the 50-day MA as it went from 24% to 46%.
($SPXA50R)
via StockCharts.com
While the aforementioned breadth indicators are good at picking out tradable bottoms they don't necessarily mark *the* bottom. Best to watch for the emergence of divergences between breadth indicators and the parent index. Stochastics of the lead indices (S&P and Nasdaq) suggest there is more downside to come so if going long, don't go long with force.
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