The Percentage of Nasdaq Stocks above the 50-day MA is about to drop below 70%, having peaked at 80%. When this particular breadth index drops below 70%, the rate of decline typically accelerates.
But while the Percentage of Stocks above the 50-day MA fell, the Bullish Percents and Summation Indices advanced. The Bullish Percents are not in overbought territory, but the Summation Index hasn't much room left to run.
The S&P finished the week flat.
While the Russell 2000 was able to enjoy the best of the week's action, closing up 1%, with plenty of support to work on the next decline.
The market continues to push boundaries, although the Nasdaq looks like it has reached its high. Even if it does break above 3,200, breadth indices suggest it won't do so for long. A false breakout in the Nasdaq would be an aggressive short.
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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