Weekly Market Commentary: Rally Maintained

A solid performance for the week kept the summer bullish momentum rolling. With bulls in control there is no immediate risk of a reversal - although market tops tend to be slow to develop.

The S&P traded similar volume the past few weeks, which is a little disappointing given the upside break of the ascending triangle.

($SPX)

via StockCharts.com

The Nasdaq managed a successful backtest of support and is well positioned to advance to 2,535.

Nasdaq

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The Nasdaq 100 is trading between two reaction highs in 2008; 1,978 support and 2,022 resistance (the move to 2,053 in 2010 was a bull trap). A weekly close above 2,022 brings 2,130 into range.

($NDX)

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With respect to Tech breadth the best of the action came in the Percentage of Nasdaq Stocks above the 50-day MA. The breadth indicator cleared the bearish divergence dating back to 2009 - a significant bullish development for the long term.

($NAA50R)

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The Nasdaq Summation Index has room to resistance which is also bullish for the market.

($NASI)

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Bears will be looking to the Percentage of S&P Stocks above the 50-day MA - although July 2009 saw the breadth indicator reach 93% and it was another 6 months before the market topped (as the breadth indicator again reached 93%).

($SPXA50R)

via StockCharts.com

Until proven otherwise this market is a bulls market. Other than a hot looking S&P breadth indicator (Percentage stocks above 50-day MA) there does not appear to be an immediate market top in play. If a top is true, then look to the S&P for leads.

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