Sunday, January 16, 2011

Weekly Market Commentary: More Gains

It was yet another good week for indices as bulls hit the throttle. Starting with the Nasdaq, it gained close to 2% and is on course to test 2007 resistance at 2,818. Remember, the Nasdaq 100 has already surpassed 2007 highs.

Nasdaq

via StockCharts.com

And its the Nasdaq 100 which will have bulls frothing. If there was a disappointment it's the poor volume associated with the break of 2,217 resistance (now support).

Nasdaq 100 Index ($NDX)

via StockCharts.com

One thing I missed in my look at market breadth over the past few weeks was the Confirmed 'Sell' back in November for the Percentage of Nasdaq Stocks above the 50-day MA. Of course, the Nasdaq has powered higher despite the bearishness in Nasdaq breadth, but a decent pullback - much like the start of 2010 - is probably not far away. Keep an eye on declining resistance, there is still room to the upside but I suspect the pullback will start when this indicator touches 74%

($NAA50R)

via StockCharts.com

Small Caps are doing enough to keep up a prospective challenge on 2007 highs, but a 'sell' trigger is present in stochastics.

Russell 2000 Small Cap Index ($RUT)

via StockCharts.com

While the S&P is testing the former double bottom (resistance) from 2008 around 1,300; big week ahead for this index.

($SPX)

via StockCharts.com

Favouring the bullish picture is the break of resistance in declining resistance in the S&P Bullish Percent Index

($BPSPX)

via StockCharts.com

I think if you offered bulls an end of week down 0.5% they would probably bite your hand off. I suspect - given the decent week that it was - will see modest losses this week, but this will not break the momentum of bulls. The Nasdaq 100 is doing all the running and will bring the other indices with it.

Follow Me on Twitter

Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Zignals Trading Strategy Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

Zignals offers a full suite of FREE financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own trading system and sell your trading strategy in our MarketPlace to earn real cash.

You can read what others are saying about Zignals on Investimonials.com.

JOIN US TODAY - IT'S FREE!

 
f9229fcfd1b1390be00cfccc86c90349c93a4179bf4227457c