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.


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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.


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