Saturday, May 29, 2010

Weekly Market Commentary: Trend Down But Breadth Close to 'Buy'

What markets did last week was less the story than what market breadth offered. The S&P finished some 85 points above the first Fibonacci support level with stochastics [39,1] just below bullish support.



The Nasdaq similarly has a long way to go before it reaches the first of Fibonacci support levels (almost 200 points away). But nothing to suggest a bottom yet.


The real moves came for breadth indicators. The Nasdaq Bullish Percents finished on rising support connecting 2008/09 reaction lows; the best chance of a bounce before requiring a push to oversold levels. No technical 'buy' yet.



The Percentage of Nasdaq Stocks Above 50-day MA is deep in oversold territory at 24% but no technical 'buy'; it will take a few weeks before the MACD is in a position to do so.



The Nasdaq Summation Index hasn't quite made it to oversold levels either by 'price' or technically.



The NYSE Summation Index is in similar position but is at least oversold technically



The S&P Bullish Percents dropped into prior bullish territory, at least until 2008 erupted, now it's kinda neutral but technicals are oversold.



But the Percentage of S&P stocks above the 50-day MA is oversold with a low comparable to the major reaction lows of the past 3 years.



A buying opportunity is in the mix, but it may not be *the* buying opportunity. Monday might offer a sniff to the long side as part of an accumulator play.

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