Sunday, October 23, 2011

Weekly Market Commentary: Bulls Maintain Control

Markets closed the week at or near their highs, although the 'bear flags' on the weekly timeframes were not breached (to the upside).

The Russell 2000 continued its advance towards 760 resistance with technicals improving and a long way from overbought territory. Plenty of room for upside.


The Dow enjoyed a stronger accumulation as technicals finished the week net bullish. However, it was an index which finished on 'bear flag' resistance, so despite the bullish technical setup the preference is for a move down Monday.


The S&P was able to go a step better and edged over 'bear flag' resistance and put some distance on what had been a resistance around 1,209. Technicals also turned net bullish for the week.


The Nasdaq closed the week slightly lower, but technicals did enough to turn net bullish.


But helping the Nasdaq is the continued improvement in market breadth. The Percentage of Nasdaq Stocks on Point-n-Figure 'Buys' improved to turn technically net bullish.


So while the technical picture is net bullish across indices on the weekly timeframe, the presence of indices at 'bear flag' resistance suggests next week will be a downward one - starting Monday.

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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 Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.


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