Sunday, May 12, 2013

Weekly Market Commentary: Double Top in New Highs? Probably Not

Unusual behavior in New Highs / New Lows.  After what looked to have been a fairly reliable peak in the number of (smoothed) NYSE components at new 52-week highs, now looks set to make an even higher high. Given the last peak was a 10-year high, it's odd to see this challenged so soon. However, it does point to the overall strength of the rally to have so many components making new high - a total contrast to the action in the 2007 top.  The current situation has far more in common with peaks in 2004 and 2010, which marked consolidation points of larger rallies


Market Breadth hasn't reached overbought conditions, supporting the idea for further gains.  The Percentage of Nasdaq Stocks above 50-day MA hasn't broken the 70% barrier.  And technicals are not overbought.


The Nasdaq Bullish Percents successfully back tested support, with plenty of room for upside.


All indices are rallying within themselves, so there is no obvious signs for a top.


Another week - another opportunity to build on past strength?

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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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