***** Technical Analysis (for October 30)*****
The markets are at risk of starting the unwinding process that I've been talking about as the technical indicators are overbought but weakening from their recent highs. For example, the Nasdaq came within 5 points of the recent highest close today while the McClellan Oscillator closed at +50, eight points off of its recent high. The CCI has worsened in the past two sessions and is off of its recent high.
The Nasdaq led the way up today as it was up over 2% while the Dow was up less than 1% and the S&P 500 also trailed the tech-laden Nasdaq. The Nasdaq has resistance at 1350 and if it can rise above that on a close, it has 1425 as the next level of resistance, but unless the volume picks up substantially, it is not likely to get that high.
The Nasdaq TRIN closed at a very positive .29, as there was moderate accumulation, with a/d of 5/3, up/down volume 5/1, on 1.7B shares. The RSI rose to 59.2, while the MACD, Williams%R, DMI (ADX), Acc/Dist, and Aroon remained positive, and the Money Flow improved to positive, but it has not gotten very positive during this 3 week rally.
The Nasdaq McClellan Oscillator's 10% index is very positive, as it is above the 5% index and the zero line. The weekly stochastic improved to 47% crossed up while the daily is 91% and close to crossing down but the hourly is 71% crossed up, giving mixed signals for the next move.
The NYSE TRIN closed at a mildly positive .85, with a/d of 21/11, up/down volume 2/1, on only 1.4B shares. The Dow stochastics are mostly crossed up. The McClellan Oscillator rose to +31, with the 10% index more positive today, but still lagging the Nasdaq's Oscillator reading.
The VIX/VXN was little changed at 36.1/51.3. The put/call ratio rose to .85. Advisors are 38% bullish vs. 35% bearish, a neutral reading.
We are in the midst of favorable seasonality but that does not guarantee an uptrend from late October to April. It does appear that this rally is a little stronger than the one that started from the July 24 intra-day lows. But ultimately it probably won't be any more successful, and I doubt it will last until the end of the year as many media analysts seem to think.
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.
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