Weekly Market Commentary: Short Week - Close at Lows

With trading lost due to Hurricane Sandy, it was a bit of a non-event for the markets.  Thursday and Friday were the only real trading days for the markets last week.

It was an indecisive week, which given the relative position of breadth indicators to a swing low, suggests bears hold the edge. The Percentage of the Nasdaq Stocks above the 50-day MA sits at 35%, but lasting swing lows typically occur below 20%, so the attempt at a swing low appears weak.

The Nasdaq Bullish Percents barely moved on the week, but what movement there was, was lower. It also sits above 50%, some way from swing low territory.

It was a similar story for the Nasdaq Summation Index.  Swing lows occur around -800, but this index was only down to -234.

With breadth indices some way from a swing low, and the Nasdaq caught between support and resistance, the current push lower is likely to continue.

The Russell 2000 spent a second week at declining support. Long side plays remain favoured. Stops go on a loss of 800.

And the S&P also spent another week at support.

What went for last week, holds true for this week.  Support long side opportunities for the S&P and Russell 2000. The Nasdaq hasn't reached support yet.


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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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