The S&P maintains the 'bull trap' with Friday's low volume amplifying the weakness of Friday. Other technicals are holding on, but for how long.
The Nasdaq finished with a bearish black candlestick, but retained support of its 200-day MA. It's also pegged by 4,900 resistance, which was support at the end-of-2015, but has since proved it to be sticky resistance. The 20-day MA is also fast approaching; maybe this will be the kicker to get the index above 4,900? MACD holds to a 'sell' trigger.
NYSE Breadth looks to have marked a top with a rollover from a new high (of extreme bullishness). However, given the fall from extreme bullish breadth, the next swing low could prove an attractive 'buy' the dip opportunity.
Nasdaq breadth - particularly the percentage of stocks above the 50-day MA - is looking a little rich. This in the context of an index which still has room to go to make a new high; suggesting this advance will not be one to do it if new all-time highs are to happen.
The Nasdaq monthly chart is also pointing to a top with plenty of room before the percentage of stocks above the 200-day MA is oversold enough to suggest a long term bottom.
For the coming week, watch for a sell off to create the next swing low. The volume which accompanies the fall will give an indication as to whether the downleg will be a temporary fall, or something with more merit for shorts/bears.
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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