Sunday, June 09, 2013

Weekly Market Commentary: Recovery Too Little Too Late?

Despite a solid Thursday/Friday there are warning signs to suggest the recovery is not all it seems.  For the Nasdaq Summation Index it was a straight down week from an overbought state.


The NYSE Summation Index was also down, with a confirmed technical 'sell'. It may attempt a (weak) swing low from here, but it will need to finish next week strongly


Same story for the S&P Bullish Percents, as it reversed off overbought conditions and finished Friday at the weekly low.


Although the Nasdaq Bullish Percents had a quiet week.  While not as frothy as 2010, the breadth index is at a level typical of a swing high.


Friday's gain on the daily may offer some follow through, but the weekly picture is firmly in the bears camp. A strong week will be needed for bulls to overwhelm bearish breadth. Even then, the overbought nature of the market will require a decent cool down period - which may translate into sideways action, but hard to see new highs in the short term.

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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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