***** Technical Analysis (for November 19)*****
The Nasdaq filled the gap at 1371, making a low of 1367, and finished above the gap by 3 points, which is not definitive as far as providing the next near term move. If it had rallied strongly, then we could expect a retest of 1426 and if it had closed very weak below 1371, then it would imply lower prices ahead. One has to look at other indications anyway.
The Nasdaq TRIN closed at a negative 1.99, with a/d of 13/18, up/down volume 4/11, which indicates moderate distribution, and volume was light at 1.6B shares. The MACD weakened to turn barely negative while the Acc/Dist worsened to neutral. The Williams%R and CCI remained neutral while the DMI (ADX), Money Flow and Aroon remained positive although the Money Flow weakened.
The Nasdaq McClellan Oscillator dropped to +2, with the 10% index barely above the zero line and the 5% index, so these are on the cusp. The RSI dropped to 55.9. The monthly and weekly stochastics are crossed up while the daily is 65% crossed down and the hourly is 11%.
The NYSE TRIN closed at a negative 1.21, with a/d of 7/9, up/down volume 5/8, on light volume of 1.3B shares, as this index was stronger than the Nasdaq all session long as was the Dow. The Dow daily stochastic is also crossed down at 46% and the hourly is 31% crossed down. The McClellan Oscillator dropped to +13 and its 10% index is slightly positive.
The Investors Intelligence advisors are 50% bullish compared to 28% bearish, thus becoming more bearish in its reading. The VIX was virtually unchanged at 31.3 while the VXN dropped to 45.5, and their MACDs are mixed, though both are nearer giving sell signals than buy signals.
The Nasdaq may have some support at 1360, the location of the prior gap, and resistance at 1426, though it would not take much of a rally to take that out. The risk is that the index has formed a triple top reversal, however.
One adage that may encourage bulls is that "never short a dull market," and this market certainly has been that the past couple of weeks. On the other hand, most stocks have lost technical momentum and may be closer to the end of this rally than the beginning.
Most markets do not have strong trends that seem to go straight up or straight down, and we are nearing a crossroads because this narrow trading range is probably coming to a close with either a breakout either above Dow 8770 or below 8350.
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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