Confirmation of October Lows Continue

Thursday began the confirmation of October swing lows with bullish piercing patterns and Friday kept this momentum running - even if there is still lots of work to do.

The S&P closed at Thursday's highs and kept away from the latter's lows. Volume was a little lacking but technicals, aside from the MACD, are bearish. Monday's edge favors bulls.

The Nasdaq retained its positive test with a second 'buying' opportunity. Look for a push higher and above the 20-day MA. As with the S&P there is a MACD trigger 'buy' but other technicals are bearish.

The longer-term chart has moved into the 'Primary Loss' phase; this phase could last over a year until the desired swing low emerges.  Market Breadth has tagged oversold conditions but the Percentage of Nasdaq Stocks above the 200-day MA hasn't dropped into the sub-20% zone which has featured in every last major swing low.

Likewise, this chart also shows how the Percentage of Nasdaq Stocks above the 200-day MA offers an investor buying opportunity.

The Russell 2000 was another index finishing near Thursday's high. Again, look for upside follow through on Monday.

For tomorrow, look for a continued follow through of Thursday's buying. Longs just need to be cautious of a reversal of Friday's gains as further losses towards a loss of Thursday's lows would then be favored - raising stops to a loss of Friday's lows would protect against this.

You've now read my opinion, next read Douglas' blog.

I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for "fallond".

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Dr. Declan Fallon is a blogger who trades for education on eToro and can be copied for free. Investments are held in a pension fund as buy-and-hold.

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