***** Technical Analysis (October 20)****
Today's action was not emphatic enough to signal the next major move. The market was pretty flat for most of the session with a late modest rally turning the internals and indices positive.
The Nasdaq TRIN closed at a positive .68, with a/d barely positive at 16/15, up/down volume 3/2, indicating very mild accumulation, on light volume of 1.55B shares. The MACD worsened to neutral while the Money Flow improved to positive. The DMI (ADX), OBV, Acc/Dist and Aroon remained positive, and the RSI rose to 58. The a/d line and new highs/new lows indicators are quite positive.
The Nasdaq McClellan Oscillator (ratio-adjusted) was unchanged at -6, thereby again signalling a major move within 4 sessions. The 10% index is below the 5% index, a negative. But the Summation Index is at +475 so there is less chance of a crash at this time than if it were below the zero line.
The NYSE TRIN closed at a neutral .92, with a/d of 9/7, up/down volume also 3/2, indicating very mild accumulation, on light volume of 1.2B shares.
The NYSE McClellan Oscillator dropped 2 points to -7, also signalling a major move within 4 sessions again. The 10% index is below the 5% one as well.
The stochastics have turned more positive again for the shorter term and have remained positive for the intermediate term.
The VIX/VXN MACDs are still crossed down, a positive sign, along with low raw readings. The NYSE specialist/public short sales ratio reading remains quite positive.
The markets can suffer a correction at any time because stocks have come quite far in a short time and we are in a weak season (i.e. September/October).
But the breadth and breadth momentum indications are positive on balance and until the a/d line and new highs/new lows reverse back down with lower highs and lower lows, the path of least resistance is up until proven otherwise.
Gold rallied modestly today and bonds were flat after having had a mild rally earlier. Energy complex was lower.
All in all, the stock market as measured by the Dow, S&P 500, and Nasdaq remained constructive in their pattern and action, increasing the odds of a substantial rally being the next major move.
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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