***** Technical Analysis (for November 13)*****
The market received the "good news" today about the Iraqi acceptance of the U.N. Resolution to inspect Iraq for weapons of mass destruction, which did boost the market for a while but for the second day in a row, the market suffered a late session decline.
The Dow had been over 100 points and very close to the pivot point of 8500, reaching 8493, but then backed off of it. The Nasdaq closed again near its pivot point of 1360, beating it by one point. The S&P 500 closed below its pivot point of 900 at 882.
The Nasdaq TRIN was a very positive .36 as the a/d was 1/1 but the up/down volume was 13/5, indicating moderate accumulation, most of which occurred after the Iraqi announcement because the market had been slightly weak until then. Overall volume was a bit higher at 1.9B shares. The MACD remains slightly negative while the Williams%R, CCI and Acc/Dist remained neutral. The DMI (ADX), Money Flow and Aroon remained positive, and the RSI rose to 56.7.
The Nasdaq McClellan Oscillator dropped just one point to +13, indicating that we should see a major move within 4 sessions. The daily stochastic is still crossed down at 69%.
The NYSE TRIN closed at a mildly positive .83, with a/d of 15/16, up/down volume 1/1, on 1.45B shares. The McClellan Oscillator dropped to +7, and it is in danger of turning negative again.
The VIX and VXN have MACDs that are crossed up from low levels, especially the VIX, which is a bearish signal. The put/call ratio's MACD is also negative.
The bulls on Wall Street are saying that the market is consolidating its gains nicely since the market has not dropped much. They might be right, however, the technicals I infer to say that the bullish momentum has dissipated and there is a risk of acceleration to the downside in the weeks to come.
The Dow has had a tug-of-war between 8500 and 8350 the last few days, and from 8770 and 8350 in the last couple of weeks. The Nasdaq is at risk of completing a double top at the 1420 area.
Can favorable seasonality and the fund managers desire to rally the market so they can receive their year-end bonuses enough to cause an upturn of signifance? Or will the bearish long term chart pattern and slightly negative technical indications be portending lower prices soon?
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.
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