Weekly Stock Commentary: V-recovery continues

On the weekly charts the "V-bottoms" are not sustainable given the degree of overhead resistance but there is no real indication they are going to end soon either. The S&P could make it back to 1,000 before it heads south.

The Nasdaq went a step further and registered a breakout with 1,759 level of summer 2004 reaction lows the next point of resistance

Best of all, the Nasdaq 100 has already knocked out the summer 2004 reaction low and is on its way to the summer reaction low of 2006.

The fuel to the rally has come from sharply improved market breadth. The Nasdaq Bullish Percent broke declining resistance from 2006, a key containment area on previous rallies.

The same was true for the Nasdaq Summation Index:

Although the S&P Bullish Percent haven't made the grade the NYSE Summation Index has cleared what was acting a bear resistance.

The most overbought of the breadth indicators are the Percentage of Stocks above the 50-day MA. The S&P closed the week at a very top heavy 89.6% while the Nasdaq hit 77.64%; the latter was a 6 year high but each are not at all time highs - although the S&P is close. The weeklies will influence the dailies in favor of the bulls and it will take more than one bad week to change this - Bear beware.

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.

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