New support for the Nasdaq breakout is 3,100.
The Russell 2000 paused for a couple of week before resuming its advance. New support for this index is set at 900.
The S&P managed a support backtest last week, before powering ahead this week. Stop on a loss of 1,475.
The Percentage of Nasdaq Stocks above the 50-day MA recovered to 67% (from just over 55%), but it's a long way from the 80% level of a few weeks back. The recovery in this breadth metric could not prevent a 'sell' trigger in stochastics (with a MACD 'sell' likely to follow next week). In all likelihood, a larger bearish divergence will emerge. This will likely mean further gains - likely to last a number of weeks - before a 10%+ correction takes hold. Currently. it's a good time for short term long trades, but not a great time to be buying for long term long trades. Bulls have the edge.
To determine when this top may fall into place, look for a Nasdaq Summation Index above 600.
With Nasdaq Bullish Percents around 72.5%.
When these conditions are met, look to sell.
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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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