Thursday, May 28, 2015

Markets Recover Losses

Today's late recovery returned initiative to bulls. The Nasdaq finely placed to challenge new highs, helped by the major breakout in the Semiconductor Index; an important economic barometer.

Unfortunately another economic bellwether, the Russell 2000, is not quite there but could push beyond its declining channel should gains continue elsewhere.

The S&P is nicely placed to have a good Friday, holding above the critical 2120 level which has offered stiff resistance in the past.

While indices are ready to challenge highs, breadth metrics do offer a note of caution. Nasdaq breadth metrics have been in decline since peaking in 2013/14, creating a bearish divergence to the parent index, leaving markets vulnerable to another 2011 style sell off.

For tomorrow, a strong finish would set a positive tone heading into the weekend. But first steps first, new highs are required to build bullish confidence.

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

Share on StockTwits


Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.

Follow Me on Twitter

Dr. Declan Fallon is the Senior Market Technician and Community Director for, and Product Development Manager for 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