***** Technical Analysis (October 28)****
The market rally on heavier volume today may be followed through tomorrow by another positive day after early morning weakness. The market internals may be relatively stronger than the Dow and other indices very early tomorrow if there is profit-taking, which is normal in a cyclical bull market.
The Nasdaq TRIN was a neutral .95, with a/d of 22/9, up/down volume of 15/6, indicating moderate accumulation, on heavy volume of 2.1B shares. In strong legs up, 3+ days of heavy volume rally can occur consecutively, though I doubt that will occur now; instead, we could see another choppy rally.
The Nasdaq MACD remains negative but is narrowing the gap, while the Money Flow remains positive and as mentioned in a recent TA update, it curiously turned more positive on a down day, and now is getting even stronger. The DMI (ADX) also improved to more positive while the Acc/Dist and Aroon remain positive. The Williams%R and CCI remain neutral as do the OBV and ROC.
The chart pattern appears constructive as the index didn't close below the 50 dma during last week's decline though it did get there, and the gap was filled at 1842 but rallied out of it to close higher.
The Nasdaq McClellan Oscillator rose to +1 from -21, turning the Summation up by a fraction, and if the market breadth is positive tomorrow, then this will rise more rather than reverse course.
The weekly and daily stochastics crossed up for the Nasdaq and Dow, another positive sign, which needs confirmation on Wednesday.
The NYSE TRIN was a positive .67, with a/d of 11/5, up/down volume 3/1, indicating moderate to strong accumulation, on 1.6B shares, heavier than recent average volume.
The Nasdaq gap at 1897 was filled early and the index powered ahead and closed well above it at 1932, which has positive implications in the near term.
If we get positive internals early tomorrow, then the odds favor a Dow 10,000 and Nasdaq 2,000 within the next few days.
The bond market rallied sharply today as well, and that is the first time in quite some time that both the stock market and bond market rallied sharply on the same day. Gold stocks were a little lower.
But the action right now is in traditional stocks, especially growth stocks.
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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