Sunday, October 24, 2010

Weekly Market Commentary: Markets Keep Rising

Small gains for the market kept markets ticking higher, but breadth indicators are showing a tiring market rally.

Stochastics for the S&P are not yet overbought and with the MACD trending higher it's not yet signaling a top. I still like a test of 1,222 before November Election results are declared.

($SPX)

via StockCharts.com

The Percentage of S&P Stocks above the 50-day MA has defended 93% resistance; will the result be a modest loss like the summer of 2009, or a larger loss like the spring of 2010?

($SPXA50R)

via StockCharts.com

The Nasdaq is on course to test 2,535 as rising volume declines. Like the S&P it's not yet overbought.

Nasdaq: "

via StockCharts.com

The Percentage of Nasdaq Stocks above the 50-day MA stretched to 76% before it reversed. It closed the week at 74%, but should this week's losses extend for another couple of weeks it could get ugly for the Nasdaq. A reason to take profits on gains if nothing else.

AAAA Nasdaq Percent of Stocks Above 50 Day Moving Average ($NAA50R): "

via StockCharts.com

"

But the topping breadth indicator is the Nasdaq Summation Index. It's approaching a (former?) resistance level.

($NASI)

via StockCharts.com

The Russell 2000 kept pushing higher on the week, but there was no significant technical change for the index.

($RUT)

via StockCharts.com

Breadth indicators are turning peakish, more so than the parent indices. The risk of profit taking is one to watch over the coming weeks, but I suspect the real trouble will hit after the November Election results.

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