Weekly Market Commentary: Another Week of Breadth Declines

Markets staged a respectable recovery after Monday's sizable losses. However, the indices weren't able to stage as great a recovery in breadth as was achieved for underlying price.

The Percentage of Nasdaq Stocks Above the 50-day MA made it back to 60% after starting the week at 55%.  However, it is well off the 80% high posted a few weeks ago.


The Nasdaq Bullish Percents were more resilient, changing little, but stalling around 65%.


While the Nasdaq Summation Index finished at its lows in its second week of declines.


Given breadth weakness, the Nasdaq spent another week pegged by 3,200 resistance. However, it did rank up an accumulation week.


The Dow had the best of the action, managing a headlining stealing finish above 14,000. Although this was the exception, rather than the rule. I don' expect this to hold if weakness continues to evolve in the other indices.


This weeks action continues to evolve in a manner consistent with a top.  Any further gains in the market will likely be on borrowed time, at least until a 10-15% correction takes the heat out of the market.

---

Follow Me on Twitter

Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. You can read what others are saying about Zignals on Investimonials.com.

JOIN ZIGNALS TODAY - IT'S FREE!

Popular posts from this blog

S&P "Bull Trap"?

Image
I thought there was sufficient evidence to argue against a "bull trap" in the S&P, but it would appear the market wasn't interested in such thoughts and sellers were quick to reverse the initial push above 4,200.  Adding to the pain were new 'sell' triggers in MACD and On-Balance-Volume, although the former occurred above the 'bullish' zero line, making it a weak signal. Selling volume ranked as distribution as selling momentum picked up speed.  The index is also underperforming relative to the Russell 2000. 
Read more

"Black Candlesticks" are a concern for the S&P and Nasdaq

Image
A bright start for bulls on the back of positive $NVDA earnings wasn't enough to generate a day of meaningful gains.  However, it did help stall the losses of the last couple of days. The Nasdaq was the biggest beneficiary of today's action, but not enough to see an end-of-day finish that cleared last week's swing high, nor delivery of a large white candlestick, despite the morning breakout gap.  Technicals are net bullish and relative performance against the S&P has become consistently stronger since the start of May.  While today's candlestick I would view as typically 'bearish', today's volume ranked as confirmed accumulation (bullish). Overall, I would be looking for higher prices from here. 
Read more

Round 2 for the bearish "black" candlestick in S&P and Nasdaq

Image
The Nasdaq started brightly but ended up closing below its open price, but above yesterday's close. The S&P did something similar, although the intraday range is narrower. These two setups are somewhat complicated by the new 'buy' triggers in On-Balance-Volume for both the Nasdaq and S&P. And the new MACD trigger 'buy' for the S&P. Price action is key, so I would expect the candlestick to trump the technical picture; watch for lower prices tomorrow.
Read more

Archive

Show more