Saturday, March 20, 2010

Weekly Market Comentary: Rally Continues

Although Friday's selling took much of the shine off the week's action it was still another victory to bulls. The good news is there is still plenty of room to resistance as the S&P illustrates - although it will be a while before a fresh 'confirmed buy' signal is generated.

The Nasdaq too is not short on long side opportunity although volume was down. Note new MACD trigger 'buy'

The Nasdaq 100 is the closest to resistance; only 45 odd points before it gets to the first of the 2008 reaction highs at 1,978; memories of the credit crunch far behind! Note too it enjoyed a new MACD trigger 'buy'. Keep an eye on this index next week - what goes here will likely play out for the Nasdaq and S&P. The Russell 2000 is not in the game simply because its comparable 2008 reaction high is significantly higher than the relative reaction highs of other indices -- so there is plenty of upside room for small caps to move.

Breadth indicators are pushing beyond bearish divergences - particularly for the S&P. Despite this, there isn't a whole lot of room for maneuver in these indicators as each is heavily overbought.

I think next week will see the first is a series of down weeks to take some of the pressure off the market.

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