Market Could Slip in Pullback

Last week, the Nasdaq notched its 5th week in a row of gains. The S&P has been up in 4 out of the last 5 weeks. But the week started out shaky, as Russian troops took over the Crimea. The Nasdaq hit a low of 4,329 on Monday; the S&P hit a low of 1,834. As tensions eased in the Crimea, the market rebounded on Tuesday and held positive gains into the end of the week.

The Nasdaq gained +0.65% last week and closed at 4,336. The small-cap Russell 2000 had the best week, closing up +1.72%. The S&P climbed +1.00% to close at 1,878, and the Dow advanced +0.80%.

The market appears overbought, but overbought can always become more overbought. Breadth closed weak on Friday at -468 (advancers minus decliners). ADX is low on the S&P, in creeper mode, with +DMI on top. The weekly -DMI make a higher low, and that is a warning that the weekly ADX (at 35 now) could slip into retracement/range mode.