*****TA(Technical Analysis)for Aug 17*****
I will have my TA Article each day as the moderated post so it is at the top of the page for convenience to readers, but for another day or two, I want to have my original post explaining the Purpose of this thread to be read by new members.
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"While the Dow lost some of it's gains towards the close, the Nasdaq held firm, and close just above it's 200 dma (simple daily moving average as opposed to EMA=exponential moving average).
The Nasdaq CCI improved to positive, Acc/Dist to neutral from negative, weekly stochastic is now 44% going up (compared to 40% going sideways yesterday), and even more impressively the daily MACD, rate of change, and OBV all can be interpreted as positive now.
Nasdaq TRIN was a very positive .43, and the index is above it's rising 10 day and hourly EMA's. A/D was 21/18 and up/down volume was 5/2 on 1.43B shares. Wms%R remains positive, while DMI(ADX) is only slightly negative now. Chaikin Money Flow stubbornly remained negative.
And the daily chart is looking better, as it has broken out above resistance areas of 3865 and 3920. Next resistance area is 3982 and psychological resistance at 4000. If we can get a rally day with better breadth and volume, those resistance levels might be taken out.
After filling the gap at 3582 and overshooting it to 3521, the Nasdaq had to either reverse immediately before the close, or it would have risked a much bigger decline. Fortunately for bulls, it rallied strongly before the close, which meant that it could go higher over the next several days, which it has done. It made a slightly higher low after that (3760 close), and now is threatening to continue it's short term uptrend.
With the indicators having improved, I am not as confident that the 3521 area needs to be retested before going higher now. When the Nasdaq was trading in the low 3000's, the technicals were too oversold for it to sink much lower (and we had bullish divergences, such as the MACD and stochastics), so that made me very confident that a technical rally would occur and take us back up towards 3900, just as mid-March's technical breakdown and overvaluations made me confident of a major correction.
But now I have to admit I am on the fence regarding the next 300 or 500 point move in the Nasdaq. (Before the gap was filled completely at 3582, I was fairly sure that we needed to drop 300 points from the mid-3800's to fill that gap). One has to admit when TA appears uncertain, to paraphrase Clint, "one must know one's limitations."
If the Nasdaq can hold above 3760, and especially above 3865 on any dips, then it could fight it's way to 4000 and possibly retest it's recovery high of 4280.
The Nasdaq indicators have been whipsawed several times during the past few weeks, and if this rally peters out in the next 2-3 days, those indicators could get whipsawed again, but for now, the bias seems to be up, though begrudgingly. We have not made a higher high yet, so that is the next technical goal.
Sentiment is quite bearish in terms of investment advisors being too bullish, and the put/call ratio is not showing enough put option buyers to mark a bottom.
Monetary factors are positive now, as it appears that the Federal Reserve Board is finished raising the discount rate, which had been a negative factor during the last three raises, as we had "3 steps and a tumble" rule in effect.
Fundamentals are neutral in most respects in the shorter term, as an economic slowdown will hurt earnings over the next 1-2 quarters, but in the longer term, I believe the fundamentals are very strong for the U.S. economy, and will help boost stock prices. Remember that the stock market anticipates fundamentals by about 6 months, so if the slowdown is expected to be over by early next year, then we could have a bull market starting in a month or two.
I continue to believe that the Nasdaq is in a broad basing pattern, primarily from the low 3000's (3048/3227) to the 4000 area, and that it will break out to the up side starting in September, or October at the latest, to new all-time highs in December or January."
Dr.Bob's commentaries are not to be construed as recommendations to buy stocks, options, bonds, index vehicles, or futures. Information is believed to be reliable but cannot be guaranteed. Always do your own research before investing. |
