TA update
Monday's Nasdaq broke below a rising trendline, and
on Tuesday the prior intraday low of 3592 was
penetrated on the close, implying a retest of the
earlier lows of 3320 (closing price) and 3227
(intraday low), within a few days. While the damage
was severe the last two sessions, the Nasdaq's trin
did not indicate a selling climax, as it was "only"
2.83 on Wednesday. It has risen to as high as 50
intraday during one devastating day in April, but can
indicate a selling climax when over 10 or 20.
The Nasdaq could overshoot once again as it tests
the lows, which could put it at 3000 or 2900 if it
dropped over 10%, and perhaps 15% intraday. If that
were to happen Thursday or Friday, then technicians
would be looking for a key reversal at the close or
the next session. Many are forecasting a prolonged
Nasdaq bear market, while this observer does not
due to the ever-present New Paradigm, New
Economy, excellent earnings/revenues growth for
technology/Internet companies, and the extremely
oversold technical indicators.
The Nasdaq's MACD, rate of change, and OBV are
neutral, which is encouraging in the intermediate
term, though short term the Nasdaq and tech stocks
could suffer another day or two of sharp declines.
The Nasdaq's weekly stochastic is 8% going down,
daily 28% going down, so this index is now
approaching the low weekly stochastic of April 14
when it was 5%, which was the lowest close of the
Nasdaq since last year.
The Dow's weekly stochastic is 31% going down,
daily 13% going down, hourly 18% going down, and
New York Stock Exchange trin closed at a neutral
1.02, and long bond rates declined to 6.16% as
there may have been a flight to quality vis-a-vis the
Nasdaq sharp decline Wednesday.
This Nasdaq bear market has occurred over the last
two months, and finally sentiment has turned very
bearish in terms of put/call ratio and investment
advisors bullish/bearish, so we may be nearing a
time when these indicators point to a reversal, along
with others covered here (e.g. weekly stochastics).
Liquidity and money flow factors are not favorable
during this season, so rallies from these levels may
be very choppy and not very explosive. The first order
of business is to ascertain whether a bottom is being
put in during the next few sessions, and then the
quality of any subsequent rallies.
- Glossary of technical analysis terms
- Talk Back: Chat with Dr. Bob:.
lvlamb,,,,
#26706, By jkl on Thursday, 11 May 2000 at 12:33 PM EDT
you're a trip lv,,,,
#26705, By jkl on Thursday, 11 May 2000 at 12:29 PM EDT
Caveat: We could fill the gap just below 3585, an
#26704, By Drbob512 on Thursday, 11 May 2000 at 11:58 AM
EDT
DR bob: |
