***** Technical Analysis (week ending January 23)****
The Dow finally had a down week after 8 weeks up while the Nasdaq was up very marginally this week. Some of the technical indicators are resetting and the question is how much more do they need before another rally, as we have broken above prior recovery highs.
By the way, double tops and bottoms typically are 3-6 months apart. The Dow made a double top in March and June of 2000 before it fell dramatically in partially catching up with the Nasdaq. Blue chips take longer to distribute at the tops and fall less than more speculative stocks in bear markets. Also, the major indices made a bottom in October and December, 1974.
The breadth and breadth momentum indicators are still positive in the intermediate term measure of 2-6 months, thought that does not mean that all of the indices will continue to be firm for that long. The short-intermediate term of 2 weeks to 2 months could see both a continuation of the pullback and also another rally to new recovery highs.
Gold and silver have pulled back for a couple of weeks now while the USD has rallied. Gold has support at $400-$402 and then at $388-$394 (prior resistance levels).
The USD may rally to 88-89 where it was unable to close at last week, but it may retest 85 in February and eventually reach the 79-80 level in the first or second quarter of this year.
Crude oil has remained stubbornly high at the $33-$35/barrel and probably will stay above $30 on pullbacks and reach a higher range of $36-$40/barrel in the late February to May timeframe.
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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