The relationship between new highs and lows in the NYSE is also building a head of steam. There is no clear marker for a low, but action here is approaching levels last seen during the worst of the credit crisis.
The Transports are not quite there. The 2011 level has been breached, but it hasn't yet gone as far as 2009 levels. Technicals are showing clearer bottom markers than price action.
The bear market Russell 2000 is approaching the measured move target from the head-and-shoulder pattern; it's above 50 points away as of from Friday's close. The weekly chart finished with a bullish hammer, so watch for a stronger close which may mark this week as the swing low week. .
The weekly chart of the Dow has generated a number of spike lows around 15,550. If this level breaks, then it will be heading to 14,750. Stochastics are pointing to a bear market, but price action is holding lows.
Monday is the start of a new week and a chance to confirm a low in the markets. Daily charts showed decent gains, albeit on light volume, but more will be needed if value buyers are to step in and take control.
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 also trade on eToro and can be copied for free.
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