***** Technical Analysis (for November 26)*****
For the first time in a week the market indices couldn't shake off sellers, and dip-buyers didn't have conviction, as the Dow fell over 170 points and the Nasdaq 37. The question technically is whether the market will find support soon so that the indicators such as the McClellan Oscillator will turn back up before turning negative. That oscillator has turned up after dropping to zero and plus 2 readings in the past month, and could do it again. But the days seem to be numbered for the market in any case.
For today, the Nasdaq TRIN closed at a negative 1.95, with a/d of 13/20, the exact opposite of yesterday's a/d, while up/down volume was also exactly opposite of yesterday's 7/2 by being 2/7, indicating moderate distribution, and on moderate volume of 1.9B shares. The RSI dropped to 60 after failing to reach 70. The MACD remains slightly positive while the Williams%R worsened to negative but the DMI, CCI, Money Flow, Acc/Dist, and Aroon remained positive. The rate of change and OBV remain negative. The daily stochastic is 79% crossed down. The McClellan Oscillator dropped to +22.
The NYSE TRIN closed at a very negative 2.16, a/d of 11/20, up/down volume 1/4, on 1.5B shares. The Dow daily stochastic is 70% crossed down. The McClellan Oscillator declined to +19.
The sentiment indications are slightly to moderately negative, as the advisors are much too bullish and the put/call ratio's MACD and RSI are giving negative signals, and the VIX/VXN are at very low levels that are more indicative of a market top than a bottom.
A one day drop does not make for a downtrend, and we have to see how the market acts on Wednesday. The Nasdaq and other indices are above their 50 dma's but below their 200 dma's but close to them. If we do not have a sharp selloff on Wednesday, the bulls may once again gain courage and rally this market back up to the prior highs in the days to come. One should not forget that the day before and after Thanksgiving are more often up than down. But more bearish divergences showing up soon will give us a red flag warning of an impending bearish reversal.
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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