Weekly Market Commentary: Recovery Too Little Too Late?
Despite a solid Thursday/Friday there are warning signs to suggest the recovery is not all it seems. For the Nasdaq Summation Index it was a straight down week from an overbought state.
The NYSE Summation Index was also down, with a confirmed technical 'sell'. It may attempt a (weak) swing low from here, but it will need to finish next week strongly
Same story for the S&P Bullish Percents, as it reversed off overbought conditions and finished Friday at the weekly low.
Although the Nasdaq Bullish Percents had a quiet week. While not as frothy as 2010, the breadth index is at a level typical of a swing high.
Friday's gain on the daily may offer some follow through, but the weekly picture is firmly in the bears camp. A strong week will be needed for bulls to overwhelm bearish breadth. Even then, the overbought nature of the market will require a decent cool down period - which may translate into sideways action, but hard to see new highs in the short term.
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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 NYSE Summation Index was also down, with a confirmed technical 'sell'. It may attempt a (weak) swing low from here, but it will need to finish next week strongly
Same story for the S&P Bullish Percents, as it reversed off overbought conditions and finished Friday at the weekly low.
Friday's gain on the daily may offer some follow through, but the weekly picture is firmly in the bears camp. A strong week will be needed for bulls to overwhelm bearish breadth. Even then, the overbought nature of the market will require a decent cool down period - which may translate into sideways action, but hard to see new highs in the short term.
---
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!