***** Technical Analysis (January 9)****
The heavy volume this week with only modest rallies gives a confusing signal. Today, Friday, traded according to the "Friday reversal" rule as the market was up for the 4 days prior to today's session. If the demand was mostly used up in the heavy buying this week, then we could see a significant pullback next week. There has been equity fund inflows which could provide buying on dips.
Breadth and breadth momentum remain positive while technical indicators are mostly positive but mixed for the short term.
The first quarter could still see Dow 11,000-11,250 as blue chips are likely to remain firm and have choppy rallies while the Nasdaq rallying is not as sure, and the S&P 500 could range between 1080-1170.
I expect the second half of the year to be worse than the first half, with weakness in the August to October timeframe, and then an oversold rally in November and part of December, followed by a very sharp decline in 2005.
The USD will make lower lows at least into the Summer, perhaps finding the 80 level after trading recently near 86. Any technical bounces may only be for 2-3 pts.
Gold may reach an intermediate top concurrent with the USD in the 79-81 (cash futures price) range in the second quarter, perhaps in May, which is the end of the India Wedding season. Gold could reach $450-$460 by that time.
Silver may rally to $7.00-$8.00 by Summer as it has relative strength now over gold.
Crude oil could stay in the $28-$34 range, but there is a fair chance of reaching the $38-$40/barrel price temporarily, this year. And natural gas may stay in a high trading range from 6-8.
Bonds rallied today but remain in a new bear market apparently, with yields to range mostly between 4.2%-5.% for this year, with higher yields later this year.
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.
Dr.Bob's mission is to teach Technical Analysis and demonstrate a structured approach to Market Analysis, for position and swingtrading.
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