Weekend Review: NASDAQ & S&P

After years of relative stability the weekly charts of the indices are just a mess of volatility; a test of Oct/Nov 2008 lows looks to be a necessity if a certain degree of stability, and more importantly confidence, is to be restored to buyers. The S&P has been fishing for a bottom; the last attempt came on December 1st and was confirmed on December 29th but supporting technicals are more-or-less flat - so it's hardly a ringing endorsement.


The story is no different for the Nasdaq, the only difference was the bottom and confirmation came 1 week later than for the S&P:


Nasdaq Bullish Percents may be on intermediate 'sell' signals, but on the weekly chart they show a significant break of declining resistance dating back to the start of 2007 (which turned into an early warning sign of the crash which followed). Whether this turns into a new bullish signal will be dependent on starting a run of higher lows and higher highs.


But the Percentage of New Highs cleared a 'sell' signal - it just needs technical confirmation.


And the Summation Index is pinned to resistance - the same resistance which was breached in the Bullish Percents


Things are warming slowly for bulls but breadth indicators suggest it could be the latter part of the year before bulls have some meat on which to build a rally.

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Popular posts from this blog

Markets attempt a swing low for the seven day decline

Image
It looks like we have completed a zig-zag retracement for indices, with the Nasdaq and Russell 2000 finishing the day with a second doji for the 'zag' to match the intial doji of the 'zig'.  There were additional support levels for indices to use too.  For the Nasdaq, today's 'dragonfly doji' also has the potential to form a bullish harami doji - building off the 20-day and 50-day MAs. There was a 'sell' trigger in relative performance against the Nasdaq, along with 'sell' triggers in the ADX and On-Balance-Volume. 
Read more

Low volume selling after Russell 2000 breakout

Image
Yesterday finally delivered the long awaited breakout in the Russell 2000 on higher volume accumulation.  Today saw some low key selling on lighter volume, but the selling was not accompanied by distribution. The Nasdaq still offers net bullish technicals, but today's selling kicked in on the test of its 200-day MA. Yesterday's buying did count for accumulation. 
Read more

Minor losses pressure Thursday's reversal attempt

Image
I was looking for more from Friday's trading action as sellers were able to prevent buyers from gaining any traction over the course of the day.  A soft open got softer as the day progressed and the week finished with markets now looking vulnerable to a gap down open on Monday.  If there was a positive it was that selling volume was light, but there was further technical degradation by the close. This was perhaps hardest felt in the Russell 2000 ($IWM), which sold off by less than 1%, but there was enough weakness to see a 'sell' trigger in stochastics to turn technicals net bearish for the index.  There is a support level around $192.85 which needs to hold if the index is to continue a sequence of higher highs - higher lows from the February bottom.
Read more