Saturday, November 17, 2012

Weekly Market Commentary: Breadth Still Not At Low

Despite adding to existing longs of my investment holdings (my trading account is decimated!), it's still looking a little early for a breadth swing low.  However, I didn't want to get caught on the wrong side of a 'Santa Rally' (should it come), so thought Friday was a good day to add to longs.

The Percentage of Nasdaq Stocks has dipped into swing low territory, but it's typically the first breadth indicator to reach a bottom.


But the Nasdaq Bullish Percents are still some way off. Technicals are not oversold either. Strong swing lows  come in the sub-30% area, with minor swing lows possible in the current range.


The Nasdaq Summation Index is getting close, but technicals are still some way from a bottom. I usually look for swing lows from -800 and lower, but it's conceivable a bottom could develop here.


The Nasdaq is trading inside a band of support running between 2,800 and 2,865.  The rising trendline of wedge support is also available on the low end of the aforementioned range.  Technicals suggest 2,800 won't be a swing low, but price action will always trump technical action.


The Russell 2000 confirmed a breakdown of trendline support. Technicals are a long way from oversold, which is somewhat worrying; 745 support may not be enough.


The S&P followed the Russell 2000 by breaking trendline support. Technicals are only in the early phase turning sour, it may be necessary to watch the Russell 2000 for leads in the S&P.


Will Santa make an early call? Should a swing low emerge it will not be a major one, but it will be a tradable one.

---

Follow Me on Twitter


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.

Zignals offers a full suite of FREE financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own strategy and sell it in the MarketPlace to earn real cash.

You can read what others are saying about Zignals on Investimonials.com.
JOIN ZIGNALS TODAY - IT'S FREE!

0 comments :

 
f9229fcfd1b1390be00cfccc86c90349c93a4179bf4227457c