The Nasdaq Bullish Percent indicator has again in the process of rolling over around the 42% mark; off typcial bear market tops around 50% and well off bull market tops where 70% of Nasdaq component stocks enjoy point-n-buy signals. To have the index rise at much as it has with only 42% of component stocks on 'buy' signals is not the kind of form strong rallies are made of. The area to look for a bullish divergence between the breadth indicator and the parent index; the Nasdaq undercuts July lows but the bullish percents stay above the 25% mark. The percentage of stocks above the 50-day MA shows similar struggles as it bumps into the 60% resistance area. Ultimate Oscillator switches to a 'sell' signal. The Summation Index always gives the smoothest signals. It too has come up against May high resistance and is still some 250 points off bear market top territory. Technicals still strong (particularly the MACD). Get the Fallond Newsletter Dr. Declan Fallon, Senior Market

With the light volume one shouldn't read too much into technical breaks, but as I noted in my newsletter there were breakdowns for the Dow and S&P: However, both of these indices have support to look forward too. The one index which doesn't have much support to work with is the NYSE: It's an interesting contrast to the Russell 2000 which is ready to break to new highs: In bull markets small caps carry more weight as money switches from 'safe stocks' to more speculative issues, but usually the relationship is a simple case of leader and laggard; not the current case of small caps on the verge of breaking key resistance while large caps look to break major support. The only fly in the ointment would look to be the insipid month of August where little major action occurs. Will this situation drift into September before it gets resolved? Possibly. Get the Fallond Newsletter Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market aler

August is not known for its hectic trading. Is there anything we should be watching? Maurice Walker comments on weekly charts: As a technician I monitor the weekly charts very closely because they are the compass, map, and life jacket of the future direction of the market. But the bad news bears insist that we should ignore the improving technical situation that is occurring on the weekly charts and believe them. They continue to snub their noses at this rally and for the past four weeks they have been telling us that the market is going to drop tomorrow, well tomorrow has come and gone and so far our rising trendlines remain in tact. Three weeks ago we witnessed the Russell 2 K weekly chart's histogram, move into positive territory. Last week the Nasdaq's weekly chart had the histogram turn positive, and now this week the QQQQ's weekly chart followed suit, as its histogram moved into the positive column. The Russell 2 K has been up for 6 consecutive weeks and is now testi

In line with the latest release of Silverlight charts on Zignals I have a post on the Zignals blog which looks at three stocks picked from the Blogosphere: Wall St. Warrior featured Amgen ( AMGN ) AC Investor took a look at Apple ( AAPL ) Downtowntrader latest pick from a couple of days ago was PetSmart ( PETM ) -eom- Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Headline charts points to the lack of participation of the NYSE index to the rally. I think small caps have greater relevance for supporting an advance (which are doing very well), but it's one to keep an eye on as it was an index I had ignored and hadn't realised it was struggling. Yesterday's action looks to have created new bearish rising wedges for large cap indices. Note the bearish divergence in slow stochastics and sell signal with the bear cross of -DI over the +DI as 50-day MA fails as support. Bad omens, but it's dependent on price breaking rising support of the wedge. Dow theorists will be watching the transports. Similar bearish wedge to the Dow, although it trades above both 50-day and 200-day MAs. These are the watchpoints for the rest of the week (in addition to HeadlineChart's NYSE). Get the Fallond Newsletter Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

With the dollar strengthening and the Euro weakening I took another look at the S&P priced in Euros. If the strengthening dollar (weakening Euro) can boost U.S. equity prices we will soon see a nice 'buy' signal following a positive test of the 2003 (yes - "2003") lows in the Euro:S&P relationship. A rally in this relationship could quickly work its way towards 2007 highs and a chance to confirm a double bottom: The positives on this chart are the dual doji at 2003 support and the rising MACD histogram. Both work on the background of oversold short and long term stochastics following a successful test of the early 2008 low. So while the dollar priced S&P shows some leg work to do as it builds a handle, it might not be as far away from the good times as some might otherwise think. Get the Fallond Newsletter Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Will a dollar rally become the new hype machine for the market shrills? Certainly the dollar has been hurt over the past 6 years. But with gold double topping and other commodities weakening there is a good case for a lengthy rally in the greenback. The recent complex (quad-)bottom in the dollar also coincided with a bear trap, while the push above 74 broke the 6-year declining trendline. This aggregation of positives should be enough for a challenge on 80.72 resistance with a long term (5-year) objective of 92.17. Any strength in the dollar will be bullish for equities. The more broader indices push higher the stronger any buying will be when they slip into retests of prior lows. If during such retests the dollar continues its advance (with oil and gold likely weakening even more) then bears will find their directional positioning increasingly tenuous. Get the Fallond Newsletter Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock ch