***** Technical Analysis (for November 12)*****
A late profit-taking decline prevented the technicals to turn very positive but rather fulfilled the expectation that we would have a technical bounce on Tuesday after 3 black crows, which frequently results in a cessation of selling pressure temporarily.
The Dow had been up almost 150 points and it lost over 2/3rds of that gain by the close while the Nasdaq held on to most of its gains but it did not recover all of the losses from Monday.
The pivot points for the Nasdaq, Dow and S&P 500 may be 1360/1420, 8500/8770, and 900/965, respectively. The first pivot points may be reached in any decent technical rally in the days to come if the market does not decline sharply.
It appears likely that the second half of November could be worse than the first half, as several technical indicators are perhaps setting lower highs or weaker positive readings, such as the McClellan Oscillator, RSI, and Money Flow. We may be in the process of turning down to Dow 8200/8000 and Nasdaq 1279/1221 (gap).
The Nasdaq led the way again today, with TRIN of .18, a very extreme reading as there was strong accumulation of u/d volume 9/1 on a/d of 21/12. Volume was light at 1.6B shares. The MACD, Williams%R, CCI, and Acc/Dist remained neutral while the DMI (ADX), Money Flow and Aroon remained positive. The RSI rose to 55.2.
The Nasdaq McClellan Oscillator rose to +14 and its 10% index rose above the zero line again. The daily stochastics are still crossed down at 63%.
The NYSE TRIN closed at a moderately positive .75, with a/d of 3/2, u/d volume 2/1, on light volume of 1.35B shares. The McClellan Oscillator rose to +10.
The VIX/VXN were little changed at 35.4/55.2, respectively but their MACDs are giving bearish signals. The put/call ratio rose to .86 while the VXN's MACD is negative. The advisors are still more bullish than bearish by a wide margin, according to Investors Intelligence.
Perhaps a surprsingly positive earnings report or some other "good" news could provide a strong one or two day rally, but the odds favor another downdraft this month as the rallies have been on moderately light volume and bullish momentum has been lessening.
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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