Weekly Market Commentary: Breadth Recovers, But Still Net Bearish
The Masters has me distracted, so I will just show two charts:
The Nasdaq has had a very good run of form of late, but it hasn't really changed the breadth picture a great deal. Bulls will look to the new swing low which will be confirmed if the Nasdaq Summation Index crosses above its 5-day EMA, and other breadth indicators hold their 5-day EMA. Bears will see a dominant bearish trend, particularly in the Percentage of Stocks above the 50-day MA, and suggest the current run is nothing more than a relief rally.
From a trading perspective, you need to protect yourself against false breakouts. Because of the vulnerability of the breadth metrics it will be important 3,270 holds as support (for the Nasdaq). A loss of 3,168 would confirm a 'bull trap'.
The Nasdaq 100 shows the battleground nicely. Horizontal support at 2,825 is key.
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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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The Nasdaq has had a very good run of form of late, but it hasn't really changed the breadth picture a great deal. Bulls will look to the new swing low which will be confirmed if the Nasdaq Summation Index crosses above its 5-day EMA, and other breadth indicators hold their 5-day EMA. Bears will see a dominant bearish trend, particularly in the Percentage of Stocks above the 50-day MA, and suggest the current run is nothing more than a relief rally.
From a trading perspective, you need to protect yourself against false breakouts. Because of the vulnerability of the breadth metrics it will be important 3,270 holds as support (for the Nasdaq). A loss of 3,168 would confirm a 'bull trap'.
The Nasdaq 100 shows the battleground nicely. Horizontal support at 2,825 is key.
---
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!