CHARTING MONEY: Living With Lower Stocks
30 Apr 12:00
By Stephen Cox, CMT
A Dow Jones Newswires Column
NEW YORK (Dow Jones)--The bullish case for U.S. stocks evidently depends on
whether the important lows of Sept. 21 will survive a test, perhaps by
mid-June.
I, for one, believe the lows will hold because U.S. indexes so precisely
touched down on target support on Sept. 21. I might say that those lows were
too good not to be true.
However, in technical analysis, seeing beats believing, and the sell-off of
the past week seriously damaged the charts. For example, even if the Nasdaq
Composite finds a base of technical support between 1658.98 and 1600, it would
have to close above 1734 to make good.
And even so, only a close above 1806.88 would complete a technical breakout.
In this climate, it's easier to assume that the Nasdaq will test the 1400
handle before it tests the 1800 handle.
Nearest support for the Dow Jones Industrial Average is now 9782.06. A bounce
from that support could easily be good for a test of 10043, just short of the
April 26 high of 10082.67. However, DJIA won't be going anywhere meaningful on
the upside if it can't close out this week above 10166.95.
U.S. 10-Year Yield Testing Key Resistance
The U.S. 10-year yield is testing 5.120% - 5.133% resistance. That resistance
is likely to hold and turn the yield back down to 5.034% at least - probably
into the 4% handle ultimately. If the yield decisively takes out 5.133%
resistance, however, a move up to the 5.26% area is underway.
USD Probing A Technical Bottom
The nearby U.S. Dollar Index is still liable to dip to 114.53, perhaps by the
end of this week. Dollar-related forex markets are now implying that the
contract may not move appreciably below 114.53, however.
EUR/USD's high for its uptrend since February is 0.9044 recorded on Monday.
The market's failure to test 0.9076 and this morning's 0.30-odd point loss may
mean that bull move has ended. Confirmation of that possibility is late-day
trading below 0.8900.
USD/JPY is still pointed down to the 127.51 - 126.97 support band. But the
top of that band isn't far from Tuesday's intraday low so far, which is 127.84.
To try out the new Charting Markets weekly technical newsletter go to
djnewswires.com
For more technical analysis see: Dow Jones Newswires, N/DJTA; Telerate, page
4073; Bloomberg, NI DJTA; and Reuters key word search "Charting Markets." CQG
key word search "Charting".
-By Stephen Cox, Dow Jones Newswires; 201-938-2064; stephen.cox@dowjones.com
(Stephen Cox, a chartered market technician, is chief technician for Dow
Jones Newswires.)
(Data by CSI, Commodity Research Bureau)
(END) DOW JONES NEWS 04-30-02
12:00 PM |
