The Market Gets Rocky Again

07/19/2012 8:15 am EST

Focus: MARKETS

Long term, the markets continue to slog ahead, but short term there may be some pitfalls, notes Rich Bieglmeier of iStockAnalyst.com.

There was a whole lot of action last week, but by the end of a feel-good Friday, not much changed for the indexes from week-to-week. Except for the Nasdaq, the major markets closed within five points of their respective July 6 tallies.

While Friday's big run was certainly welcome, volume was middle-of-the-road for the Dow and S&P. However, it was the lightest day of the five for the Nasdaq. From iStock's perspective, we prefer the Nasdaq to pull the sled, not ride in it—more on that later.

The indexes u-turned moments before crashing through the guardrail. They narrowly avoided a fiery crash over the cliff's edge. From a chart watcher's view, that's move you want to see: stocks hitting the bottom edge of support and rallying.

That's what happened on Friday, and for now, the stock market remains in an upward moving channel; nothing changed from last week.

chart
Click to Enlarge

Ahh, but some of iStock's market measuring utensils moved to less sturdy footing.

Market Type: Sideways/Volatile
Not much changed here, except for a big spike in the weekly range from top to bottom. Overall, the needle barely budged in a week where the indexes closed flat. What else would you expect?

Momentum Model: Buy
Without Friday's furious close, we would have had our first momentum sell signal in a while. It is not surprising, considering how little volume traded on the plus side last week compared to red days.

The good news: every needle is pointing skywards. The bad news: there is no margin for error, as the score is only 0.2 away from a sell signal.

Market Leadership: Sell
As we mentioned up top, the Nasdaq failed to outperform our proprietary mix. Much like our MO model, leadership is on the brink of moving back into buy territory with a few days of gains.

Read more at iStockAnalyst.com here...

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