***** Technical Analysis (October 27)****
The Nasdaq gapped up at the opening to leave an open gap below at 1866 now after having filled the gap at 1842 on Friday. It filled the gap above at 1874 and there is another one above at 1897, so we shall see if it too gets filled.
The a/d line and new highs/new lows remain in up trends while the Summation Index is going down due to the McClellan Oscillator being in negative territory, thereby giving mixed signals.
The Nasdaq TRIN closed at a moderately positive .64, with a/d of 21/11, up/down volume 5/2, indicating moderate accumulation, on light volume of 1.5B shares. The RSI rose to 49, a neutral reading. The DMI (ADX) improved to positive while the Money Flow, Acc/Dist and Aroon remained positive. The Williams%R, CCI, ROC and OBV remained neutral and the MACD remains negative.
The Nasdaq weekly and daily stochastics remain crossed down while the hourlies are crossed up. The McClellan Oscillator rose to -21 while its 10% component remains crossed below the 5% one, remaining negative.
The NYSE TRIN closed at a negative 1.15, as a/d was positive at 2/1 but up/down volume was only 9/5, indicating mild accumulation, on light volume of 1.35B shares. The McClellan Oscillator rose to -20. Weekly and daily stochastics remain crossed down while hourly is crossed up, so a near term rally is likely and then it is unclear.
The VIX/VXN MACDs are uncrossed now after having been crossed down, so they have worsened to neutral from positive.
The major indices remain above their 50 and 200 day moving averages, so in the short-intermediate term of 2 weeks to 2 months they may still be positive.
The lack of follow-through to the downside today bolsters the case for bulls who say that the decline last week was a resetting retracement.
The true test comes when we have sellers coming back into the market this week and whether there will be a bullish response or not.
Gold stocks were modestly lower while bonds, energy complex and the USD didn't move much today. Gold may have a worsening risk-reward ratio now that it has rallied back up above $390/oz and may be forming a double top reversal formation. It can avoid that by a breakout above $394.
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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