Sunday, July 01, 2012

Weekly Market Commentary: Middling Breadth

Last week's strong finish left markets nicely positioned on the bullish side, but with room to maneuver before things get too hot. The Percentage of Nasdaq Stocks above the 50-day MA turned net bullish as it climbed above the 50% level.


The slower moving Nasdaq Summation Index hasn't yet turned net bullish, but is in the process of creating a swing low.


The only concern is the Bullish Percents, which have been slow to turn.


However, the Nasdaq is back threatening the bull trap, but there is still 200 points of ground to make up before it can put this bearish supply behind.


The S&P is still toying with former channel support turned resistance, but is at least heading in the right direction. However, it's only on the verge of channeling its 'bull trap'; big week ahead for the index.


The Russell 2000 is also in the process of challenging prior supply from the head-and-shoulder pattern with new multi-year highs in range. If the bull market from 2009 is to continue it will be necessary for Small Caps to lead out - can 850 be broken?


With the holiday week ahead markets are unlikely to find an answer this week, but it will be important the bulk of Friday's gains hold.

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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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