Range Bound Noise

Friday's gains came off the back of weak technicals, and didn't really change the larger picture. The S&P is bound by the March swing high/low (the high also marking a double top around 2,115). Until either of these levels break there is little more to add. Even the 20-day/50-day MA isn't offering much help.

The Nasdaq finished with an indecisive doji just above the 50-day MA. The failure of last week's bounce to challenge 5,000 is a tick in the bear column, as was the generally negative reaction in FX markets to Friday's jobs data. A move back into the prior trading range of 4,540/4,815 looks favoured, and should this happen, then a test of the lows has a high probability for success.

The Russell 2000 is behaving the best of the indices, but it hasn't done enough to challenge recent highs just yet. Technicals are near term bearish, but are still net bullish over a 6-month time frame.

The Nasdaq 100 is holding on to 4,300 support. Friday's action suggests a clean break of support for Monday, but if by early afternoon there is no recovery, then things could get ugly.

Monday will offer interesting insight. The Spring breakouts are under threat, which opens up 2015 swing lows as the next challenge. Lose these, and markets could struggle for the rest of the year.

You've now read my opinion, next read Douglas' and Jani's.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com, and Product Development Manager for ActivateClients.com. I do a weekly broadcast on Friday's at 13:30 GMT for Tradercast, covering indices, FX and gold, silver and oil - all are welcome! You can read what others are saying about Zignals on Investimonials.com.


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