***** Technical Analysis (week ending Sept 17)****
The market is either printing out a complex topping formation as it did in the first quarter and several times since March, 2000, or it is producing a strong stochastic "pop" which will result in a heavier volume rally leg up.
The Nasdaq monthly stochastic rose to 72% crossed down, weekly rose to 51% crossed up, daily dropped to 91% crossed up, hourly dropped to 78% crossed up. The McClellan Oscillator declined to +34, and its Summation is rising at -16, as it is now going to reach the zero line barring a sharp decline on Monday.
The Nasdaq MACD, DMI, CCI, Williams%R, Acc/Dist, Aroon and Money Flow remained positive. As I mentioned before, by the time the Aroon improves to neutral or positive, the market may be ready to reverse back down, at least as a correction.
The Dow monthly stochastic remained at 86% going sideways, weekly dropped slightly to 66% crossed up, daily declined to 78% crossed up, hourly is at 66% crossed up. The NYSE McClellan Oscillator dropped to +21 and its Summation is rising at +960.
The Nasdaq is still operating with the "cross of death" but is above its 50 dma and below its 200 dma.
We are very overbought and it will now take very heavy volume rally days to prevent a reversal.
Bonds rallied sharply this week and have done so for several weeks as the 10 year note is now close to 4% after having reached almost 5% earlier this year. It appears that is will remain in this trading range for months despite the likelihood of another minor rate hike in September or in November.
Crude oil went back up late in the week and also is rangebound in the 40's but could fall into the mid to high 30's in the next 6 months.
The longer term picture appears dire for stocks if deflationary pressures occur for assets such as stocks and real estate. Bond rates could rise a bit in the next 6-12 months from where they are now but will likely turn back down if deflation does occur, which is what occurred in Japan. Real estate values can go down during declining rates which is what occurred in the 1930's in the USA and in Japan in the 1990's.
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. There are many other TA structures, strategies and systems.
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