Sunday, September 12, 2010

Weekly Market Commentary: Trading Ranges Continue

Consolidations continue to be the order of the day (week!) for markets. But the picture for some markets is less clear than others.

The S&P is shaping a potential triangle which - if it follows the new trend - should break lower; a potential 210 points is on offer as part of a measured move down. On the flip side, bulls will be watching for a push above 1,129 and the 120 points on offer if the triangle plays this way.

($SPX)

via StockCharts.com

The S&P breadth indicators are out of oversold conditions and rising - suggesting the aforementioned triangle has a chance of beating the trend and breaking higher. The Summation Index has yet to make it to resistance.

($NYSI)

via StockCharts.com

While the S&P Bullish Percents have a potential double bottom to work with.

($BPSPX)

via StockCharts.com

The Nasdaq is still offering a (bearish) head-and-shoulder reversal as part of a downward channel - although there has been no confirmed touch of the lower channel. A break of 2,309 to the upside would negate the downward channel and probably put the head-and-shoulder pattern to bed too. Technicals are still in bear territory.

Nasdaq

via StockCharts.com

Nasdaq Breadth Indicators are not as bullish as they are for the S&P. The Summation Index is lacking the technical strength of the NYSE Summation Index.

($NASI)

via StockCharts.com

The Russell 2000 is still playing to a bearish head-and-shoulder reversal, enticed by the trading void below.

($RUT)

via StockCharts.com

Whether one is looking at triangles, channels or head-and-shoulder patterns, there is no immediate change on the horizon; next week's action is unlikely to change that. Traders will find it hard to position themselves for trades lasting longer than a day or two. Under consideration are seasonal factors which may give bears the edge.

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