Hi Dave. I agree completely that the indicators aren't perfect.
In particular, I think the Gold Bugs and the Oil&Gas Daily charts have had questionable value.
I don't usually invest in either sector, so I've been thinking of dropping those two indexes, but I'm letting them ride, mostly to see if there are patterns.
Perhaps in the case of those two indexes, different parameters for the indicators would work more efficiently.
The Nasdaq is a different issue, I think.
I think the Exchange Charts have been pretty reliable.
The Nasdaq Daily buy signal was seven or eight days ago.
Anyone who acted on the signals, by say playing the QQQ's,
has had a nice return.
Here's the QQQ's Daily chart.
stockcharts.com[e,a]dallyimy[dc][pb20][vc60][iUd20!Ub14!Ll14!La12,26,9!Lp14,3,3!Lc20]
Note; the buy signal occurred with price under $34.
It's been to $38. and closed at $37.73
Worst case, the Nasdaq did top out last week,
the sell signal will be generated somewhere around $36., as the 20 day MA is currently at $35.34, and the MA is moving up.
So, where's the Nasdaq going now?
Has it topped out?
Well, the key is what the Nasdaq Weekly chart does now.
The Nasdaq Weekly chart is giving a hold signal.
What does that mean?
Well, for me, it means if I've got something I bought on that Nasdaq Daily buy signal, I'll hold.
If I'm not in, I'll hold-off until the signal goes one way or the other.
So, has the Nasdaq topped out?
Maybe, or maybe not.
On the Nasdaq Daily chart, the Stochastic and its sister indicators, the CCI and RSI, are in the overbought zones;
however, the ADX is rising suggesting the start of a trending period, (look to the MACD) and the MACD momentum lines are rising. THe MACD histogram is flat.
So, the Nasdaq Daily looks like it could go higher, to me.
On the Nasdaq Weekly chart,
the most obvious thing is that the price is at the 20 week MA.
This is often resistance or support.
That's why it has significance.
A confirmation of the price cross of the 20 week MA would be very significant, I think. We'll see.
The last confirmed signal on the Nasdaq Weekly chart, using these indicators, was the sell signal early in September 2000, about 60 weeks ago.
Looking at the chart, you can see five times that the Nasdaq Weekly price bounced off the 20 week MA, in the first half of this year.
It may well bounce off again, but if it doesn't, and if we get that DMI confirmation, it will be quite bullish.
On the weekly, the ADX is falling (non-trending period, watch Stochastic) and the Stochastic is rising.
I see nothing in the chart that would make me assume last week was the top, but until there's confirmation of this weekly signal, I'll be watching the stocks I'm holding, watching for sell signals on the Daily charts.
Long winded reply, I know.
Bottom line; I don't agree that the signals are wrong for the Exchange charts.
The Oil & Gas Daily has been too volatile to play, IMO.
This may be because of the indicator parameters, or maybe there are just times when world events make Oil&Gas stocks a crap shoot.
Cush |
