Sunday, January 29, 2012

Weekly Market Commentary: Breadth Breakout

The past week saw some significant moves despite the weaker Friday close.

For the indices there was a breakout in the Russell 2000. This cleared the former neckline and brought the index into the congestion zone of the early part of 2011.


The Nasdaq also edged a breakout on higher volume accumulation, although the real challenge is the 2011 high.


Supporting the break in the Nasdaq was the break in declining resistance of the Percentage of Nasdaq Stocks above the 50-day MA:


The Nasdaq Bullish Percents also cleared declining resistance at 58%, leaving room to maneuver to the next (minor) level at 65%.


Along with declining resistance in the Summation Index.


The S&P built on its breakout from last week with another gain on higher volume accumulation


This followed similar breaks in S&P market breadth.

The weekly picture continues to look good for bulls. Last week's breakouts in the S&P were followed by breaks for the Nasdaq and Russell 2000, on higher volume accumulation. There should be sufficient momentum to see 2011 highs challenged, but it will likely require another volume injection to see them broken.

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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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