Saturday, November 12, 2011

Weekly Market Commentary: Little Change

There was little change in the weekly picture as Large Caps continued to put their best foot forward, while Small Caps and Tech indices remained pegged by their respective 'bear flags'

The Russell 2000 spent another week stuck under 760 and kept a potential of a bearish head-and-shoulder pattern in play. For this to be true, 760 can't be breached and a decline back to the 593 neckline should happen soon, preferably starting next week.


Large Caps enjoyed the best of the weeks action. Two weeks ago they emerged from the 'bear flags' influencing other indices and last week were able to recover the losses of the previous week. Technicals are not overbought - but rising - suggesting there is more upside to follow.


Helping the S&P was the break of long standing declining resistance (from 2009) in the NYSE Summation Index.  This well help fuel the Large Cap rally.


The Nasdaq closed the week on a 'spinning top', reflecting indecision. The 'bear flag' is intact, but technicals are pushing higher - although its gains are slowing.


Nasdaq market breadth is under a little pressure as the rate of advance slows. The Nasdaq Summation Index is slowing around the 200 mark, although its maximum for the current cyclical market is up in the 600s.


In summary, weekly advances for Small Caps and Tech indices slowed as money channeled itself into Large Cap stocks.  No index is overbought, so the potential for further advancement remains. While Tech averages are closest in breaking to new multi-year highs, it's Large Caps which are enjoying the best of short term momentum.  Seasonal factors favor bulls from here into 2012.

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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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