Weekly Market Commentary: Nasdaq Breakout
All indices are in breakout mode. The Nasdaq finally cracked 3,200 resistance which had kept it pegged back. The Russell 2000 and S&P also started to add new legs to their breakouts. However, the bounce in breadth hasn't reversed the bearish divergence, which suggests an end-phase run.
New support for the Nasdaq breakout is 3,100.
The Russell 2000 paused for a couple of week before resuming its advance. New support for this index is set at 900.
The S&P managed a support backtest last week, before powering ahead this week. Stop on a loss of 1,475.
The Percentage of Nasdaq Stocks above the 50-day MA recovered to 67% (from just over 55%), but it's a long way from the 80% level of a few weeks back. The recovery in this breadth metric could not prevent a 'sell' trigger in stochastics (with a MACD 'sell' likely to follow next week). In all likelihood, a larger bearish divergence will emerge. This will likely mean further gains - likely to last a number of weeks - before a 10%+ correction takes hold. Currently. it's a good time for short term long trades, but not a great time to be buying for long term long trades. Bulls have the edge.
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To determine when this top may fall into place, look for a Nasdaq Summation Index above 600.
With Nasdaq Bullish Percents around 72.5%.
When these conditions are met, look to sell.
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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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New support for the Nasdaq breakout is 3,100.
The Russell 2000 paused for a couple of week before resuming its advance. New support for this index is set at 900.
The S&P managed a support backtest last week, before powering ahead this week. Stop on a loss of 1,475.
The Percentage of Nasdaq Stocks above the 50-day MA recovered to 67% (from just over 55%), but it's a long way from the 80% level of a few weeks back. The recovery in this breadth metric could not prevent a 'sell' trigger in stochastics (with a MACD 'sell' likely to follow next week). In all likelihood, a larger bearish divergence will emerge. This will likely mean further gains - likely to last a number of weeks - before a 10%+ correction takes hold. Currently. it's a good time for short term long trades, but not a great time to be buying for long term long trades. Bulls have the edge.
To determine when this top may fall into place, look for a Nasdaq Summation Index above 600.
With Nasdaq Bullish Percents around 72.5%.
When these conditions are met, look to sell.
---
Follow Me on Twitter
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.
JOIN ZIGNALS TODAY - IT'S FREE!
