Gottfried and Don. Thank you for updating the charts and tables for us. Great work! I've been very encouraged by the market action until today. We will probably see a little more consolidation before rising further according to Harry Boxer:
Closing Technical Market Comments
Tue Aug 20th 2002
A GOOD DOWN DAY!
By Harry Boxer, The Technical Trader (www.thetechtrader.com)
thetechtrader.com
Considering the fact that the New York Stock Exchange McClellan Oscillator closed up +224, the highest and most overbought reading Since October 1998,almost four years, I wasn’t surprised to see the market open lower today, which it did. The pre-opening futures were lower and the market gapped down a bit. But we quickly stabilized and rallied back to resistance on both the NDX and S&P 500 before going lower for most of the rest of the morning and through lunch hour.
Shortly after lunch the market firmed up after making lower lows and then rallied to the afternoon highs, which stopped at the declining tops lines or price resistance on the indices. Subsequently, the market sold off in the last hour of the session.
Net on the day the Dow was down 119, the S&P 500 down 13, the Nasdaq Composite and 100 down 18, and the SOX Index down an ugly 17.38 or 5% today.
A review of market technicals showed that the advance-declines were similar on both New York and Nasdaq, both around 19-13, or 3-2 negative. Up/down volume on New York was less than 2-1 negative, with total volume of about 1.3 billion. On Nasdaq up/down volume was about 8-5 negative, with total volume a little less than 1.5 billion.
A review of my board today showed mostly losers. Larger-cap stocks were led on the downside by eBay down 1.45 and Broadcom down 1.01. Microsoft was down a little less than a dollar as well.
On the plus side, Emulex stood out today, up 1.13, a nice percentage gain. Also, in the low-priced sector, OVTI, despite a solid earnings release that came out today above consensus estimates and guiding higher for the next quarter, still got hammered for $2.35 on very heavy volume of 2.2 million shares.
Stepping back and reviewing the market today, considering the overbought condition and even though we were down on the day the market did a pretty good job of consolidating without a dramatic pullback and that augurs well for future price progress. Because the indices still need to continue to work off the overbought condition, we should see some additional backing and filling and retesting perhaps of the trend lines and moving averages at lower levels.
On the Nasdaq 100, drawing a line across all the tops since June, yesterday afternoon’s rally touched that line and backed off. If we can break through that line we could get another dramatic move-up but we may have to back and fill first.
The S&P 500 & DJIA indices, look slightly more bullish than the NDX and remain in solid up-trends with rising bottoms and rising tops, and are currently backing off to test support.
So I’m looking for the market to continue to consolidate and try to work its way back up to retest the highs sometime later in the week.
Good trading!
Harry
Keep an eye on the VIX. If it is rising then we are not likely to see a rise in the SOX or related stocks:
stockcharts.com[h,a]daclyyay[pb50,200!d20,2!c20][vc60][iUb14!Uk14!La12,26,9]&pref=G
RtS |
