***** Technical Analysis (October 13)****
The major indices were up today and most closed above their opening prices, a positive indication in the very near term. The overall volume was light as a result of the quasi-holiday of Columbus day as government offices were closed.
The Nasdaq TRIN was a neutral 1.04, with a/d of 11/5, up/down volume 20/9, indicating mild accumulation, on light volume of 1.5B shares. The MACD and Money Flow were more positive and even the ROC improved as it almost became positive today.
The others were positive except the Aroon which is neutral but will turn positive very soon if the market does not turn back down in the next day or two. The RSI rose to 63.4 and leaves room for more upside action if it is to get to the mid to high 70's as it has before.
The Nasdaq McClellan Oscillator rose to +36 with the 10% index well above the 5% index now and well above the zero line, both positive signs. The stochastics are all crossed up, enjoying "stochastic pops."
The NYSE TRIN closed at a positive .80, with a/d of 23/9, which is very strong breadth, a/d of 3/1, indicating moderate accumulation, on light volume of 1.0B shares.
The NYSE McClellan Oscillator is at +36, which is about mid-way from the neutral to very overbought level of +70. The Summation Index is at +907, and if it is to retest the prior recent high of +1600, the Dow, S&P 500 and NYSE Composite will move up another 5-7% at a minimum. There is no guarantee that it will be retested as it could make a lower high.
The Nasdaq made a new recovery high today and may be ready to lead the market to the upside if earnings beat expectations in the next 1-2 weeks.
There is not much reason for many to sell right now and the pressure is definitely provided by demand for stocks considering the bullish momentum from a technical standpoint. Each time there is a profit-taking pullback, dip-buyers come in, and those who sold for profits need to buy back in at some point.
Short-sellers have gotten squeezed for many months now and now they have less conviction due to the recovering economy (including some improvement in employment figures lately) and higher corporate profits and capital spending.
For now the bulls are enjoying a cyclical bull market and in the next year we shall see if this bull is part of a larger, secular bear market or not.
Gold stocks firmed a bit but may be retracing their recent drop and could retest their recent lows or make a lower low before stabilizing and then resuming its bull market trend. Bonds were not traded today but I am not bullish on bonds for the longer term. The USD was up and is trying to retrace some of its decline but remains in a bear market with much lower prices for its future. The energy complex was flat but has improved technically after having lagged other sectors for many months.
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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