Sunday, July 29, 2012

Weekly Market Commentary: Comprehensive Breadth Recovery

Market Breadth continued its improvement on the weekly time frame.  The April low is playing out as a major swing low for breadth and the rally from this low still looks to offer further upside.

The Percentage of Nasdaq Stocks Above the 50-day MA is net bullish (technically) with 59% of Nasdaq stocks above their 50-day MA.  Plenty of room for upside.


The Nasdaq Bullish Percents had a more low key week. Technicals for this instrument are still net bearish. The April low hasn't followed through yet.


While the Nasdaq Summation Index bucked the trend by closing down last week, although the April swing low is clear and technicals are net bullish.


The improvement in Nasdaq breadth has nicely shaped the parent index.  There is a clear 'handle' forming above 2,885 with the spike lows into 2,800 over the past few weeks indicating demand.  Below this is a good place for stops on long positions.  Technicals net bearish but improving.


The S&P had an interesting close to the week. It managed to push above a past resistance level at 1,370 and work a challenge of the earlier 'bull trap'.  However, it continues to ride former channel support turned resistance.


The Russell 2000 was quiet.  It still has lots of work to do before it gains some fresh air above.


Positive stuff for next week with the Nasdaq best placed to post further gains.

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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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