Another week of gains on typical August holiday trading. The S&P ran up against ascending resistance with the market overbought (but no surprise there); would wait for a MACD trigger 'sell' before getting too antsy if a bull. April 'Buy' signal holds. The good news came with a long term resistance break for the Nasdaq. It would be good to see a break of the 2006 reaction low but given such a break occurred long ago for the Nasdaq 100 this is not such a concern (for now). March 'Buy' signal holds Small caps have no obvious resistance nearby and their April 'buy' signal holds Market Sentiment is operating in real thin air - looking at the Nasdaq Bullish Percents it is hard to see where more gains are going to come from. The Nasdaq Percentage of Stocks above the 50-day MA is riding a 'sell' signal on a bearish divergence Same is true for the Nasdaq Summation Index: It's a conflict between firm bull trends in the indices and strong bearish se...

There was a respectable follow-on to Wednesday's gains. The Nasdaq was able to make it above 20-day MA. The Nasdaq 100 did likewise but the Semiconductor index was unable to break above its 20-day MA after its third day of gains. However, there was a CCI 'buy' signal, backed by weak bullish crossover in trend strength (+DI > -DI) for the latter index: The Dow is showing some interest as it approaches rising channel resistance; an upside break would mark another, sharper, trend shift. So is it going to take a fall H1N1 outbreak to knock the market out of its stride? Bears are again feeling the squeeze. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts , stock charts , watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

The Nasdaq closed with a weak bullish engulfing pattern (the Nasdaq is not oversold) on higher volume accumulation. The 20-day MA remains an overhead challenge but the broader rising channel from April is the dominant trend at play here (and in other indices) However, the Dow was able to regain its 20-day MA which bodes well for the Nasdaq and Nasdaq 100 The Russell 2000 too closed above its 20-day MA But the semiconductor index has work to do Richard Lehman has the current market picture down to a 'T'. Watch how the 5-minute channels play out as today demonstrated picture perfect reversals off channel resistance. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts , stock charts , watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

Yesterday's recovery wasn't enough to prevent new MACD 'sell' signals in the Nasdaq Summation Index or Bullish Percents. These signals followed the earlier MACD 'sell' in the Percentage of Nasdaq Stocks above the 50-day MA. Adding to the malaise was the confirmed bearish divergence in the MACD with respect to the Bullish Percents. Looks like it's going to be another weak start for the indices so look to these sentiment measures to weaken even further. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts , stock charts , watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

Monday's losses created a trading void between Friday's close and Monday's open - a void which saw the first excursion by bulls on Tuesday. A straight look at market percentage gain made the day look better than it was; inroads into the various index gaps were shallow and unconvincing. A larger move to the 20-day MAs will probably see shorts step up to the plate and there will be no shortage of late July early August buyers looking to head to the exits too. There were no additional bearish turns in supporting technicals for lead indices and market volume was below that of Monday. Rising channels hold the key. Any action between the channel lines is noise and it won't be until there are tests of rising channel support will the health of the March-August bull rally be known. For now, markets will duke it out between 20-day and 50-day MAs. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts , stock charts , watchlist, multi-currency portfolio m...

Sentiment had looked to have topped in June but markets put on another surge to take them August highs. Now sentiment looks very rich with 88% of S&P stocks over their 200-day MAs and bullish percents running at 78%. Each of the sentiment indicators have cut below their 5-day EMAs generating a confirmed 'Sell' signal. While S&P downside is the obvious short term outcome there are positives to take home. The strongest point for bulls is sentiment has surpassed resistance levels which have marked this cyclical bear market. What will be important will be the levels these reach when support eventually kicks in as buyers return. The Nasdaq tells the same story, although the Nasdaq has a substantial bearish divergence in the Percentage of Nasdaq Stocks above the 50-day MA. So - at what point will buyers emerge? Sentiment suggests not for a time yet. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts , stock charts , watchlist, multi-currency por...

The sideways consolidation which the various indices enjoyed for the past few weeks collapsed under the weight of bearish expectation. The 20-day MAs were cleanly sliced to set up the first point of reversal. The only downside was the lack of volume on what should have been a very heavy volume day. The big gap down didn't break technicals in the Nasdaq but the Dow flashed a MACD trigger 'sell'. Small Caps also suffered a MACD trigger 'sell' But the semiconductor index is still the weakest index here with the 50-day MA only a few points away However, in each case (including the S&P) rising channels are there to provide support when the indices fall enough to reach them; watch volume when this happens - it will give the best indication as to whether this is a more significant downtrend or a pullback for the rally. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts , stock charts , watchlist, multi-currency portfolio manager and stra...