Saturday, June 05, 2010

Weekly Market Commentary: Bears Press the Advantage

Market Breadth may be in the bulls' court but the trend continues to move with bears. Technically, for the S&P it was an important break to the downside as stochastics pushed into the lower half of their range; suggesting there is more downside to come before this trend runs its initial course.

($SPX)

via StockCharts.com

The Nasdaq was another to fall victim to the bearish shift in stochastics, dropping below the important '50' bull/bear mark (the Nasdaq 100 is still on the bull side of the fence).

Nasdaq

via StockCharts.com

Nasdaq Bullish Percents also cracked below rising support, putting them on course for a push down below 40% - currently 51% of Nasdaq stocks are on Bullish Percent 'buys'

($BPCOMPQ)

via StockCharts.com

While the Percentage of Nasdaq stocks above the 50-day MA remain oversold and in 'buyers' territory.

($NAA50R)

via StockCharts.com

While the Summation Index is making its way to broadening wedge support (which is also oversold territory), currently around -800.

($NASI)

via StockCharts.com

The Russell 2000 is the only index with support to look too and stochastics which are bullish.

($RUT)

via StockCharts.com

However, buyers of large caps have an S&P Percentage of Stocks above 50-day MA at levels similar to January 2008 and March 2009 bottoms (9%), although the Summation Index and Bullish Percents still have a little room to go lower.

($SPXA50R)

via StockCharts.com

So while Friday loses were heavy, they didn't break the daily trading range markets had created over the prior 2 weeks. However, weekly charts suggest there are a few more weeks of downside before a significant bottom is reached.

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