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Strategies & Market Trends : Ahh Canada - 2 out of 3 ain't bad -- Ignore unavailable to you. Want to Upgrade?

To: Cush who wrote (4259)	3/10/2002 12:38:21 PM
From: Cush	Read Replies (1) \| Respond to of 5144

<font color=blue>Comments on the Weekend Indexes and reading the charts. Been doing a lot of thinking, frustrated thinking, about how to read these charts, in these markets. Something I really appreciate about those who have chosen to participate in this thread, from time to time, has been the straight-forward analysis of indicators. For me, it has become increasingly difficult to filter out the market Fundamentals when I am trying to concentrate on the Technical Analysis of the charts. Too often, I find myself wanting to skew my interpretation of the indicators, because I have certain opinions about the Fundamentals. It's a tight-rope walk, trying to focus on the TA without losing sight of the FA. I have no experience with tight-rope walking, but I have spent a lot of time on logs and booms (three years logging on the Ottawa River, when I was a student). One of those mischievous things we'd do to some rookie was to get him to look up at a bird flying by. It's easy enough to fall off a log, but lose your focus, and it becomes a sure thing. So, I'm trying to interpret the TA in these charts, without looking at the Fundamental geese flying by. The Dow Industrials On the Daily chart, the ADX is rising (trending market) and the MACD momentum lines are rising and positive, which is usually bullish. Note the MACD histogram has gone flat and may even be starting to drop. What does this mean? The histogram is a visual representation of the relationship between the MACD momentum lines. When it goes flat like this, it can be interpreted as showing the current trend weakening. Or is it just consolidating? Easy to know in hindsight. Hard to be sure when you're at the hard right edge of the chart. My *guess* is that a serious correction *may* be just ahead. My guess is somewhat based on the very low level of the -DI. As I read that, investors haven't been pulling their money out. They've been letting it ride, and with the influx (+DI), that has driven the market rally. I expect the -DI won't stay that low, and in this momentum driven market, I also expect that selling will stimulate more selling. Though with a rising ADX, the MACD is the indicator of choice, I still keep an eye on the Stochastic. It's snaking along up in the overbought zone. That's at least a reason to continue to be cautious, IMO. On the Weekly Dow, price is right at that upper blue trend line. A trend line exists because (for whatever reason) price has either found support or resistance at that level, on previous occasions. In this case, this blue trend line was drawn using a series of lower highs, during this almost-three-year downtrend. This is a weekly chart, so the key figure will be where it closes next Friday. That's options expiry day, right? You see how insidious these Fundamental thoughts are. Although I was calling this Dow Weekly chart unpredictable, a few weeks ago, I really thought it looked bearish. Go back a few weeks. The price was falling approaching the 20 day MA. The DMI had failed to confirm the Buy Signal, and appeared to be growing more negative. With ADX falling, the Stochastic was the indicator of choice. It was falling and looked like it had lots more room to fall. Then something happened to make the chart even more unpredictable. The indicators reversed. Maybe that long price dance along the lower blue (support) line of that downtrend channel was a clue. I don't know. I find unpredictable charts extremely hard to trade. This chart now suggests that we should rally from here. Is it any more reliable now than it was two weeks ago when it looked like we should fall? I don't know. This summary is probably getting tedious for anyone who's reading it. I'll stop here, and begin another post with comments about the Nasdaq and TSE charts. If anyone cares to comment on the Technical aspects of these charts, please do. Cush

To: Cush who wrote (4259)	3/11/2002 4:20:17 PM
From: Davy Crockett	Read Replies (1) \| Respond to of 5144

Hi Cush, HAPPY ANIVERSARY!!! Just noticed that your site was created on March 6th 2001 What a go! Please keep up the great work that you do here on the Ahh Canada thread... & please continue those great charts along with your incisive analysis. Very much appreciated. Regards, Peter

To: Cush who wrote (4259)	3/11/2002 7:38:07 PM
From: Cush	Respond to of 5144

<font color=green>The Indexes - Monday Chart signals are updated on my web site, under Index Charts. www3.sympatico.ca Signals unchanged from the weekend. Still- Two Hold Signals; the Nasdaq Weekly and the Gold Bugs Daily. Buy Signals everywhere else. Cush

To: Cush who wrote (4259)	3/12/2002 6:59:08 PM
From: Cush	Respond to of 5144

<font color=green>The Indexes - Tuesday Chart signals are updated on my web site, under Index Charts. www3.sympatico.ca The Nasdaq Weekly slipped back into a thin Sell Signal today. Otherwise, the signals remain unchanged. That doesn't mean there aren't things happening in the charts. In this Dow Daily Chart stockcharts.com[e,a]dallyimy[dc][pb20][vc60][iud20!ub14!ll14!la12,26,9!lp14,3,3!lc20][J1082377,Y]&listNum=10 note what's happening with the ADX and DMI lines. The +DI is falling and has just dipped below the ADX which is rising. This type of cross is a warning signal for me. I think it is often a precursor of a price decline. Note also, the flat -DI (red) line. As I read that, there's still no one selling. I think that low level is unsustainable. That, too, suggests a need to be cautious with long positions that depend on a stable or rising Dow. Lastly, the CCI is poised for a downward cross of the 100 line. That's another warning signal that I watch. Often, not always, price declines significantly shortly after that cross. It hasn't crossed yet, and it may not. In February it crossed down and then rebounded a few days later, and the price has had a great run. No signals are perfect. If I ever find the perfect, infallible signal, I'll stop posting here, and in about two years, I'll buy Hawaii. 'Til then ... I'm trying to read the signals and play the odds, as I see them. Cush

To: Cush who wrote (4259)	3/13/2002 8:15:51 PM
From: Cush	Respond to of 5144

<font color=green>The Indexes - Wednesday Chart signals are updated on my web site, under Index Charts. www3.sympatico.ca The signals remain as they were yesterday. Cush

To: Cush who wrote (4259)	3/14/2002 8:30:15 PM
From: Cush	Respond to of 5144

<font color=green>The Indexes - Thursday Chart signals are updated on my web site, under Index Charts. www3.sympatico.ca Decided to move the Nasdaq Daily down into a Hold Signal. It's a very close call as the +DI and -DI are on the same spot. Everything else remains the same, though I find this Dow Daily chart represents a deteriorating situation. stockcharts.com[e,a]dallyimy[dc][pb20][vc60][iud20!ub14!ll14!la12,26,9!lp14,3,3!lc20][J1082377,Y]&listNum=10 Looks to me like the MACD and Stochastic are both suggesting the next move is *likely* down. But who knows? Something other than reality seems to be moving these markets. Cush