Sunday, April 17, 2011

Weekly Market Commentary: Down But Not Out - Again

The weekly view of the markets remains bullish enough, helped in large part by the successful defense of the breakout in the Nasdaq 100. Selling volume has also been light. While many indices remain stuck under resistance, there are still broad bullish channels at work. The opportunity for bulls to flex their muscles will come when markets drift far enough sideways to hit support of these channels - then bulls will have something concrete to work with.

The Nasdaq 100 has the chops to muscle higher. Notice how the MACD histogram continues to make higher (reaction) highs and the current decline has effectively flatlined (i.e. not getting any weaker).

($NDX)

via StockCharts.com

While the breakout continues to hold sway in the Nasdaq 100, the Nasdaq has a good opportunity to follow higher.

Nasdaq

via StockCharts.com

The Nasdaq bullish percents have also dug in a 60% support (good enough to give this rally another push with the majority of stocks on 'buy' signals)

($BPCOMPQ)

via StockCharts.com

Although the Percentage of Nasdaq Stocks Above the 50-day MA is caught in the middle at 50:50

($NAA50R)

via StockCharts.com

As is the Summation Index

($NASI)

via StockCharts.com

The Russell 2000 has done well to get back to challenging its 2007 high. If it was the next index to make a new multi-year high it would give bulls (and stock breakouts) a huge boost. It's not far away from doing this.

($RUT)

via StockCharts.com

The S&P has been the laggard, which is no bad thing in a strong bull market, but it will need to pull away from 1,300 if it's to follow Tech and Small Cap indices into a challenge of the 2007 high. At the moment, the 1,300 level is acting like a magnet which is keeping it back.

($SPX)

via StockCharts.com

For next week, eyes will be on the Russell 2000 and Nasdaq. The former is more important for stock traders as money flowing into small caps represents money flowing into more speculative issues.

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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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