Weekly Market Commentary: Nasdaq Breakout
Nasdaq
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The Nasdaq 100 continued to add to its breakout. It has gone well beyond nearest support and is some 300 points off a measured move target. Can it make it to 2,700?
($NDX)
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However, the Nasdaq Bullish Percents are struggling at overbought levels; not many new stocks are available to support the rally.
($BPCOMPQ)
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With the bearish divergence more evident in the Percentage of Nasdaq Stocks above the 50-day MA. Since the peak in the 80s from the 2009 low the percentage of Nasdaq Stocks above the 50-day MA is down at 63%. When it drops below 50% rapid declines in the market frequently result.
($NAA50R)
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Small Caps added a second week of gains. The push off the bull flag continues to gather bullish momentum.
($RUT)
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The S&P was good enough to add a percentage point on the week.
($SPX)
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The same bearish divergences are playing out in S&P market breadth as for the Nasdaq. The NYSE Summation Index is just shy of resistance. Although a 'buy' trigger was generated in the supporting MACD.
($NYSI)
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And at 89% the S&P Bullish Percents can't get more bullish.
($BPSPX)
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The rally is still very much in play. While it's hard to expect every week to be a winner it's going to be a hard rally to break. Bearish divergences in supporting market breadth suggests a correction is likely to occur sooner rather than later. But this correction is unlikely to break the broader trend higher. The cyclical bull market continues...
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.
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