***** Technical Analysis (for January 9)*****
The schizophrenic market managed another sharp rally today after a sharp loss yesterday. The blue chips in particular are not breaking down yet and thus it indicates the institutions have not started distributing stock in any serious or sustained way.
For Thursday, the Dow rose 180 points (to reach the resistance level near 8770 again), with a NYSE TRIN of .43, very positive, an a/d of 23/9, up/down volume of 5/1, on 1.5B shares, which is light for this time of year. The McClellan Oscillator roe to +25, with the 10% index starting to reach extreme levels again. The Dow weekly stochastic is 84% going up, daily 95% going up but the "d" is still low enough for a further rally, and the hourly is 86% going up.
The Nasdaq TRIN closed at a very positive .33, with a/d of 23/10, up/down volume 7/1, indicating strong accumulation, but on light volume of 1.7B shares. The MACD, DMI and CCI remained positive while the Williams%R improved to positive, and the Money Flow and Acc/Dist are neutral. The Aroon remained negative. The RSI rose to 58.8. The index is just above the 200 dma (1435) and needs to stay above it or risk a sharp decline as has occurred at other times when the index rose just above the declining 200 dma.
The Nasdaq McClellan Oscillator rose to +20 and its 10% index is now positive again. The weekly stochastic is 79% going up, daily 94% going up, hourly 83% going up, so it too is starting to get overbought. The index now has reached 1442 and 1445 in the past 3 days, and that resistance level needs to be taken out on a closing basis in order to confirm this rally continuing, just as the Dow needs to rally further after rising to 8776 today.
The bullish momentum today implies more strength in the next few days though the lack of volume and a few bearish divergences, such as the VIX and VXN bearish divergences, could limit the gains and result in a bearish reversal starting by next week.
Remember that longer term indicators and Elliot Wave counts are signalling much lower prices in the months ahead, presumably after this rally ends in the near future.
Dr.Bob's commentaries are not to be construed as recommendations to buy or sell stocks, options, or ETF's as Dr.Bob is not a Registered Investment Advisor. Information and data provided here is believed to be reliable but cannot be guaranteed to be accurate. Always do your own research and due diligence before investing or trading. Remember that Technical Analysis can change by the day, and as such, one day's TA may not be the next day's TA interpretation.
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