Courtesy of Declan Fallon
The number of New Highs – New Lows continues to map a top, although for the parent index this is more likely to be associated with a sideways market, rather than a hard sell off as occurred in 2008.
The daily chart for the Russell 2000 displays vulnerabilities, although the weekly chart remains bullish, with a few opportunities for buyers to step in on future price declines.
Although the Nasdaq offers the better opportunity on the daily time interval, with the weekly chart offering good support for a rally too.
Until there is a significant break of support, or all market breadth indicators become overbought, the rally should continue for a little while longer. However, for those tracking my investment strategy, Friday qualified as a day to take profit / sell covered call day: the S&P has extended itself by more than 10% from its 200-day MA. The last time this signal was given was March-April of last year; two months later the S&P was down nearly 9%.
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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. You can read what others are saying about Zignals on Investimonials.com.