For the first time since October 2007 markets, like the Nasdaq, have started to reach overbought long term momentum levels (stochastics 39,1). No immediate indication that a reversal is at hand although there are negative divergences at play in the MACD The S&P has broken from what looks to be an upward neckline head-and-shoulder pattern. The backtest, when it comes, will be important. However, the chief area of concern remains the breadth indicators. The Nasdaq Bullish Percents triggered a MACD 'sell' Even the sharp recovery in the Percentage of Nasdaq stocks above the 50-day MA was not enough to reverse its confirmed 'sell' with the same story for the Summation Index The concern at this stage is for a repeat of the 2007 meltdown which was founded on negative breadth divergence; the longer this scenario holds - the greater the resulting fall may be. The bad news is that the rally may not yet be over which is only going to trap more bulls. Buyer beware... Dr. Declan...

Only expect sporadic updates over the next couple of weeks - Break Time! Hoping for Sun 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.

Big volume combined with new reaction highs puts the markets back on the offensive. The gains also improved some key supporting technicals which will help traders. The Nasdaq gapped and cleared downward channel resistance; putting the 20-day, 50-day and 200-day MAs behind it. There was also a MACD trigger 'buy' with all technicals net green once again. Wednesday's strength also revitalized Large cap indices - the Dow cleared declining resistance and is very close to turning technicals net green. The gains in the semiconductor index were enough to turn supporting techncials net bullish. The large gap pushing the index into a new reaction high (but not new 52-week high). May highs to challenge? Look for Wednesday's gains to consolidate with some narrow intraday action. 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.

It was a day for the semiconductors with the SOX enjoying a MACD trigger 'buy' and negation of the bearish divergence in its CCI; long term stochastics [39,1] are just shy of crossing the bullish mid-line which would be enough to turn all technicals net bullish. Resistance of 272 (the June reaction high) is next on the list of challenges With semiconductors ticking over nicely there was enough groundwork done to see new reaction highs for on-balance-volume and breaks of the 20-day MAs in the Nasdaq and Nasdaq 100 Large and Small Caps were relatively uneventful with overhead MA resistance still a concern. Maybe there is room for further gains tomorrow? Look to the semiconductors for leads... 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.

A day where bulls got excited; firm accumulation was backed by some significant moving average breaks. Best move came from the semiconductor index which powered through 20-day and 50-day MAs. Next challenge is the last reaction high (then May highs). Strength in the semiconductor index will help Tech averages test channel resistance. The Russell 2000 worked off its 200-day MAs but it also saw the 20-day MA make a bearish cross of the 50-day MA. However, the CCI made a bullish cross of -100. The S&P suffered the same fate as the Russell 2000 with the 20-day MA cutting below the 50-day MA. But it was able to push off the 200-day MA and finished the day at its highs. Should be more gains in the tank even if the next couple of days are spent consolidating Monday's move. 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.

Earnings season continues this week but other than one bad day it was a quiet week for the markets. What may happen this week? Yong Pan of Cobrasmarketview leads with a continued neutral picture in the short term and a mix of neutral-to-bearish over the intermediate term: Yong has a downside target of $81.04 on the SPY as part of the head-and-shoulder breakdown But is the S&P digging in at a support level? Anthony Caldaro of ObjectiveElliotWave has the AB of the 'ABC' in place for the S&P which either means a flat ('C' = 'A') or zig-zag (i.e. a new low wher 'C' Richard Lehman shows channels working off lower tests which will either bounce higher for a couple of weeks or acclerate lower. 7/11 -- Friday's action may have seemed dull and non-committal, but it did provide important info on the 5-minute charts. We now have evidence of blue upward minichannels. They are most pronounced on the small caps, but can also be drawn on the Dow and SP...

More of the same from last week; a downward market supported by rising long term stochastics. Volume climbed to register a distribution week; the second such week since the last accumulation week (S&P is a good example). Market Breadth indicators all showing confirmed 'Sell' signals. The Nasdaq shows the sharp advance in long term stochastics as the index toys with weekly support around 1,759. Small Caps weakest with long term support gone; it's now looking at late 2008 reaction lows for demand from buyers However, Market Breadth is in no doubt - markets are in a clear 'Sell' environment But at least Bullish Percents are approaching a relief 'Buy' signal Stick with the trend - the trend been down. 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.

Markets looked ready for a short term snap back but so far it has failed to materialise. The SOX went at it alone and looks vulnerable with the falling 20-day MA about to cut below the rising 50-day MA. A break of the 50-day MA would send shorts covering and kick start a 1-2 week rally this market looks ready to offer (only a short covering rally though). Buyers with a longer time frame will look to the 200-day MA for low risk long-side opportunities. The Semiconductor HOLDRs ( SMH ) are likely to test the breakaway gap. True breakaway gaps don't fill so anything below $20.75 puts the bullish picture at risk. 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.

Similar picture across the indices but there is a nice convergence of 'buy' signals which could support a rally for a few days. [1] A downward channel which should break [2] A positive divergence in Rate-of-Change [3] A pending 'buy' trigger in the MACD [4] A 'rounding bottom' in Stochastics. The early July breakdown gap is looking like a nice upside target. 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.

A hectic day of morning weakness followed by afternoon strength. For the Nasdaq there was a sharp rise in volume to register a firm accumulation day. The small hammer with short term stochastics close to oversold suggests a relief rally over the next couple of days. However, 50-day and 20-day MAs exist overhead to add supply. Intermediate to long term stochastics [39,1] switched to a 'sell'. Small Caps fought their own battle with the 200-day MA providing support on close-to-oversold stochastics. A rally to converging 20-day/50-day MAs will be a cue for shorts to become aggressive. Ditto for the S&P although in this index all technicals are now negative. While markets are more likely to bounce in the next day or two there is little to suggest they will gain much more with 20-day and 50-day MAs overhead to add supply. Traders market. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and...

From an end-of-day perspective, yesterday saw the loss of a possible ascending triangle on a closing break of rising support in the Dow Jones Transport Index. Fib retracements have been included as possible support areas. But this break will only add to the selling pressure in the Dow. Worringly, no oversold condition in stochastics but there is an opportunity for a sideways pattern to develop using support at 3,000 as a building block. 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.

Intermediate market breadth indicators have favoured selling pressure since the start of May and this situation looks destined to continue for probably the rest of the summer. Yesterday saw a possible bearish head-and-shoulder breakdown in the Nasdaq Bullish Percents which adds to the bearish side momentum However, all of this ignores the huge leap made in the Percentage of Stocks trading above their 200-day MA - an important long term bullish marker. So far, the recent decline hasn't impacted on stocks trading above this key moving average. With the summer not renowned for its big moves in either direction don't be surprised if the latter part of the year provides an excellent buying opportunity if stocks are able to hold the higher regions of their March-June advance (i.e. stick above their 200-day MA). Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex ...