***** Technical Analysis (October 24)****
Not surprisingly the Nasdaq filled that gap from almost a month ago at 1842 by reaching 1841 at the lows of the session and then rallied to close at 1865, a positive technical development for the time being. During up trends, gaps below should fill and then be followed by a rally to close above the gap and preferably (to those who are long) above the opening, which it did today.
While this technical action does not insure that the index won't trade below that gap in the days or weeks to come, it does imply that the odds are much better to hold than if it had closed very near the gap.
The DMI (ADX) and the RSI turned slightly negative for the Nasdaq while the Money Flow became more positive, interestingly, and the Acc/Dist and Aroon remained positive. The MACD and Williams%R remain negative, and the OBV worsned to neutral.
The Nasdaq McClellan Oscillator fell to -41 from -33, and both the Osc reading and the 10% index are starting to reach extreme levels (we got extreme intra-day, before the late rally) from which a rally can occur. But we didn't get the early morning bounce as the hourly stochastic had indicated at yesterday's close, though we got it later in the day.
So far the Dow has held support above 9400 and Nasdaq 1842 but the real test will come next week when the oversold rally likely weakens and seller come back.
Bonds rallied today as stocks sold off, switching recent roles.
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.
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