Courtesy of Declan Fallon
The Nasdaq Bullish Percents is working off overbought territory and hasn’t yet generated the broad collapse which commonly precedes major swing lows.
Although the process has started for the S&P (in the S&P Bullish Percents).
The Percentage of Nasdaq Stocks above the 50-day MA is above 50%, but falling fast. However, strong swing lows typically appear in in the sub-20% zone, with intermediate lows in the 30-35% zone. It will take a number of weeks before the Nasdaq is in intermediate low territory, let alone be in a position to offer a strong swing low.
The Nasdaq itself is some way from key weekly support, which should coincide with oversold breadth metrics when the index makes it down there.
The Russell 2000 has so far honored the rising channel, and is heading towards channel support – currently around 900.
So, markets look set to continue their downward descent with clear support not yet in range. Rallies on the daily frame are potential shorting opportunities, particularly if indices get to their 20-day MAs.
All Contributions Welcome – Thank You!
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.