Thursday, May 28, 2015

Markets Recover Losses

Today's late recovery returned initiative to bulls. The Nasdaq finely placed to challenge new highs, helped by the major breakout in the Semiconductor Index; an important economic barometer.



Unfortunately another economic bellwether, the Russell 2000, is not quite there but could push beyond its declining channel should gains continue elsewhere.


The S&P is nicely placed to have a good Friday, holding above the critical 2120 level which has offered stiff resistance in the past.


While indices are ready to challenge highs, breadth metrics do offer a note of caution. Nasdaq breadth metrics have been in decline since peaking in 2013/14, creating a bearish divergence to the parent index, leaving markets vulnerable to another 2011 style sell off.


For tomorrow, a strong finish would set a positive tone heading into the weekend. But first steps first, new highs are required to build bullish confidence.

You've now read my opinion, next read Douglas' and Jani's.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com, and Product Development Manager for ActivateClients.com. I do a weekly broadcast on Friday's at 13:30 GMT for Tradercast, covering indices, FX and gold, silver and oil - all are welcome! You can read what others are saying about Zignals on Investimonials.com.

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