***** Technical Analysis Nov. 12)****
The Nasdaq monthly stochastic is improved at 92% crossed up, weekly rose to 100% crossed up but the "d" is still low enough for more upside, daily is 100%, hourly is 99%. The McClellan Oscillator rose to +42, and its Summation rose sharply to +348.
The Nasdaq MACD, OBV, Williams%R, CCI, Money Flow, Acc/Dist and Aroon are all positive while the RSI rose to an even loftier 77 and it can take a few weeks for the RSI to unwind back down if momentum is strong enough.
The VIX and VXN MACDs remain crossed down and portend a further rise in equities. While about 1/2 to 2/3 of the leg up may have occurred already since the lows of August, there could be large moves made by smaller and more volatile issues in the weeks ahead if this is a bona fide short-intermediate term rally which it appears to be.
The Dow monthly stochastic rose to 93% crossed up, weekly rose sharply to 99% crossed up, daily is 99% crossed up, hourly is at 100%. The NYSE McClellan Oscillator improved to +51 and its Summation is at +995. The Dow closed above the resistance level of 10,250-10,300 and now may have a bead on the prior high of 10,753.
The Nasdaq may lead the market up to its high of the year in the weeks to come as volatile issues get some interest.
The most likely scenario is a continuation of the rally, perhaps after a brief respite, for the next several weeks or 1-2 months.
Crude oil prices have come down from $56 to $47 and there is a chance that the price will break further to the $44-45 range this month. But the fundamental factors should help crude find support above $40/barrel and then another advance will occur in the next 2-6 months.
The USD is oversold and could see a technical bounce before dropping further in the months to come. Bonds may have seen their best days of the year and rates are likely to rise and bond prices decline in the months to come.
For the equity markets, they could be firm until a double top and bearish divergences occur in December or next year. The secular bear market has been interrupted by the cyclical bull market for the time being it appears, and the first quarter of 2004 may not have been the beginning of the next wave down of the secular bear. The next few months should tell the story.
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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