The EMAs of New Highs are also working off a spike high, with the Nasdaq following the NYSE lower.
Despite the gain, the Nasdaq is still stuck under 3,200 - this should have cracked through by now. With the Percentage of Nasdaq Stocks Above the 50-day MA now falling, it's will become increasingly difficult for this level to break.
The Russell 2000 continues to play ball. Unfortunately, its success hasn't been enough to help drive the breakout in the Nasdaq (as I thought it would).
The S&P is also in good shape, and as a defensive index it should be the last to falter (when the time comes).
So - I'll say it again (for the umpteenth time); will this week prove to be the next swing high. And, if you are looking for a perspective of what's coming down the path, then read Barry Ritholtz's piece on the Secular Bear Market. The current cyclical bull market is close to an end, so the next cyclical bear will mark the time to go heavy into stocks. This will mean taking whatever pain an early 'buy' may bring - and look to the future...
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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. You can read what others are saying about Zignals on Investimonials.com.
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