***** Technical Analysis (for October 28)*****
The market paused today and unless we get a sharp selloff with very negative internals tomorrow, the major indices should be able to mount another rally starting by the end of the week. The technical indicators are possibly resetting with a correction in the market and may rise again, but the days (or weeks) may be numbered before the top is in.
The Nasdaq TRIN was a mildly negative 1.21, with a/d of 15/17, up/down volume 2/3, on light volume of 1.6B shares. The MACD and Williams%R remain very positive while the Acc/Dist and CCI weakened a bit though they are still positive. The Money Flow has not yet given a strong positive signal and remains mildly positive. The RSI dropped to 58.5.
The Nasdaq McClellan Oscillator dropped modestly but remains in very positive territory as is its 10% index. The stochastics remain positive and crossed up except the hourlies.
The NYSE TRIN closed at a neutral 1.00, with a/d of 7/9, up/down volume 3/4, on light volume of 1.4B shares. The Dow stochastics are mixed.
The VIX/VXN were little changed at 35.6/51.5. The put/call ratio dropped to .71. Investors Intelligence survey shows 38% bullish advisors vs. 35% bearish, which is a neutral reading.
The Dow has shown more weakness than the Nasdaq in recent days. The technology stocks on the Nasdaq have enjoyed relative strength over blue chips but not on heavy volume, so it is suspect.
The institutions have not shown heavy accumulation of stocks despite the rally from the October 9th bottom. This could change in the weeks ahead but until we see it, caution for longer term investors is prudent, as the market could reverse back down.
The Nasdaq has resistance at 1350 and 1425 while the Dow has some at 8600 and more at 9000. Gaps below remain for the Nasdaq and most growth stocks from earlier sessions.
We may be in a topping formation which can last a couple or a few more weeks but the signs of deterioration are starting to show up. Some traders may be selling into strength. Thus we need to see the Nasdaq and Dow take out 1425 and 9000 with a vengeance on heavy volume in the next few weeks or risk a reversal to retest the lows.
Dr.Bob's commentaries are not to be construed as recommendations to buy or sell stocks, options, or index vehicles. 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 or forecast.
Dr.Bob's mission is to teach Technical Analysis and demonstrate a structured approach to Market Analysis, for position, swing, and daytrading.
NEW TIME Announcement: Dr.Bob hosts Stocktimers meetings on Sunday nights to discuss the end of week Market Analyses, especially Technical Analysis, at AOLs private chat room, from 6-7 pm PST. The Stocktimers AOL meeting starts off in the private chat room, and then usually goes into the regular rooms for more capacity. Just Instant Message Drbob512 to locate him.
|
