Sunday, November 07, 2010

Weekly Market Commentary: Market Push New Weekly Highs

It was a good week for the indices as they piled on the gains on heavier volume accumulation. The weeklies offer clear defense points going forward with the first test appearing in the coming week.

The S&P cracked the last reaction high of 1,219 and is on course to test the reaction lows of 2006 and 2008 at 1,236.

($SPX)

via StockCharts.com


The Nasdaq made a clean break of 2,535 in what is looking like a 3-year (bullish) head-and-shoulder reversal. The 2007 high of 2,861 is next on the list.

Nasdaq

via StockCharts.com

The Nasdaq 100 pushed yet another breakout and is very close to clawing all the losses from 2007. Like the Nasdaq, it has broken out from a bullish head-and-shoulder pattern.

($NDX)

via StockCharts.com

The Russell 2000 still has a way to go to get where Tech and Large Cap indices are. The overall lack of performance in this index (although not last week) is perhaps the most worrying aspect of the cyclical bull market theory.

($RUT)

via StockCharts.com

Market Breadth indicators are still offering warning signs (for bulls). The Nasdaq Summation Index is nestled against potential resistance.

($NASI)

via StockCharts.com

And it's not much different for the NYSE Summation Index

($NYSI)

via StockCharts.com

The Percentage of Stocks above the 50-day MA is rolling a top for the S&P

($SPXA50R)

via StockCharts.com

While the declining resistance break for the Percentage of Nasdaq Stocks above the 50-day MA is about to see a backtest.

($NAA50R)

via StockCharts.com

Given the divergence between breadth and parent indices the easy way forward is to go with the indices until proven otherwise. With last week's resistance breaks for lead averages there is a logical backtest support areas to watch.

We will see how the week pans out...

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