Courtesy of Declan Fallon
The peak in New Highs for both the NYSE and Nasdaq is very clear and this has typically resulted in an intermediate correction, or at least a period of sideways action
The Percentage of Nasdaq Stocks above the 50-day MA didn’t quite make it back to overbought levels before it turned lower. Plenty of room down before we get a good swing low in the Nasdaq.
The NYSE Summation Index has collapsed: perhaps 2-3 weeks before it has its swing low.
But the S&P Bullish Percents have managed to work its way to a (weak) support level. This week may offer some upside, but this will need to happen early in the week if it’s to honor this.
There is also a key divergence playing out between copper prices and the semiconductor index: weak copper prices should lead to weaker semiconductor prices. The question is how long will it take before the semiconductor index takes a spin lower, taking the Nasdaq and Nasdaq 100 lower with it.
Should indices lose their 50-day MA as support, then shorts will have a free run to the 200-day MA.
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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.