Sunday, December 19, 2010

Weekly Market Commentary: Rally On

Another week of gains kept the rally ticking over and upwards. The Nasdaq is on course to test 2,818 resistance with volume rising to mark an accumulation week - the second over the past three weeks.

Nasdaq

via StockCharts.com

The Nasdaq 100 managed to go one step better and finished the week at new multi-year highs. This index has done all the leg work for the past few months and is a good leading indicator as to what other indices may do in the weeks ahead.

($NDX)

via StockCharts.com

However, the Percentage of Nasdaq Stocks above the 50-day MA is still playing to a bull trap (and therefore is bearish for the Nasdaq)

($NAA50R)

via StockCharts.com

While the Nasdaq Summation Index is playing to a broadening wedge with another resistance test in the making; Nasdaq breadth favours a reversal.

($NASI)

via StockCharts.com

The Russell 2000 managed to clear 760 resistance last week and is holding the breakout.

($RUT)

via StockCharts.com

Even the S&P looks to have managed a breakout, although the index is significantly lagging Tech and Small Caps (which is bullish - leadership is focused on more speculative stocks)

($SPX)

via StockCharts.com

The S&P Bullish Percents is edging just ahead of declining resistance but at 84% is overbought. S&P Breadth is not looking as vulnerable to a reversal as the Nasdaq so this index may tack on another few points ahead of the Nasdaq.

($BPSPX)

via StockCharts.com

A bullish bias should continue into next week in line with seasonal factors keeping things bubbling into the New Year.

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