***** Technical Analysis (October 1)****
The market internals were very strong soon after the opening and never looked back as sellers were impotent today in moving the market after over a week of weakness and some negative technical readings. But the Summation makes its sharpest and longest-lasting declines when it is below the zero line and thus far it has held up above it during the correction.
It now stands at +356/+696 for the Nasdaq/NYSE, respectively. Yesterday I mentioned that the NYSE McClellan Oscillator was unchanged at -23, thereby signalling a possible major move within 4 sessions, and it occurred today as the Dow was up over 2%, almost 200 points.
The Nasdaq is lagging right now in terms of the Oscillator and daily charts compared to the Dow and other indexes but it could reassert itself if this market can reverse back up.
The Dow thus far has held up above support at 9200 and the S&P 500 above 980. If sellers cannot gain the upper hand in the next day or two, the momentum could shift back to the bulls as then the technical indicators will have turned positive in all probability.
The Nasdaq Oscillator improved to -26 from -52 while the NYSE Oscillator turned positive at +8 from -23.
Earnings are likely to be favorable starting in a week, which could move stocks up along with fund inflows having been quite positive lately.
Today the Nasdaq TRIN was only 1.02, neutral, with a/d of 11/5, up/down volume of 12/5, on moderate volume of 1.8B shares, indicating modest accumulation. The NYSE TRIN was better at .79 as blue chips led the way and the a/d was very positive at 27/6, up/down volume of 6/1, indicating strong accumulation, on moderate volume of 1.5B shares.
The bears need to nip this rally in the bud very soon or else risk another bona fide rally. If the bulls can get the volume to increase to over 2B on the Nasdaq and over 1.7B on the NYSE for a few days in a row, we should see Dow 10,000 and Nasdaq 2,000.
Watch the internals closely for the next two days. The MACD and ROC are still negative while the Williams%R, CCI, DMI (ADX) and Acc/Dist improved to neutral and the Money Flow improved to positive.
Bulls need to see some follow through Thursday and better follow through on Friday and/or Monday; otherwise we will have choppy action and alternating up and down days.
For Thursday, some profit-taking could occur early, and as long as the up/down volume and TRIN are not very negative, the market could gain strength later in the session.
Gold stocks were mixed while bonds were steady.
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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