Weekly Stock Commentary: Breadth Bear Market is History

The indices may not have reached a bottom but the bear market in market breadth kicked off at the end of 2006 looks to have completed. The downtrends in the Bullish Percents, Percentage of Stocks above key Moving Averages and the Summation Indices (in particular) have all been breached.



The Percentage of Nasdaq stocks above the 50-day MA closed at a new 5-year high.


However, from an index perspective all key averages have only just cleared oversold conditions and could rally for a number of weeks from here. Small cap action is always important for new bull markets; 517 resistance is next.


Now it's just a matter of the indices complying. A respectable pullback is needed to relieve overbought conditions.

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.