***** Technical Analysis (October 10)****
The Friday trend reversal rule forecasted a weak day and it was basically what occurred, though instead of a moderate decline, we had a flat to very mild decline.
The market appears to be setting up for another rally, especially if we get a modest pullback early next week. But if the internals are strong early in the morning in the first or second trading day of next week, we could be off and running.
The MACD continues to improve while the ROC just improved to neutral after having been negative for weeks. Most of the others are positive as well. And the VIX/VXN MACDs remain crossed down, a positive sign.
Stochastics look good as well. The only weakened indication came from the McClellan Oscillators, in which they fell to +7/+22 for the Nasdaq/NYSE, respectively.
The next rally would be more convincing if the overall volume shot up for several days in a row to above 2.0/1.7B shares on the Nasdaq/NYSE. If it had intermittent days of heavy volume interspersed with moderate volume days, that too would be considered bullish for the intermediate term.
There will always be dips, pullbacks, and retracements/resets within primary trends, and the primary trading trend for now is a cyclical bull market. We shall see in the next year or so if it is within a secular bear market, but for now, it is wise not to fight the (bullish) tape.
Gold stocks firmed up (primary trend is bullish) while bonds and the USD have steadied though still in primary downtrends. Energy complex has gained some relative strength lately despite predictions that prices will drop in the Spring due to Iraqi oil coming to market.
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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