***** Technical Analysis (for November 29)*****
The markets took a pause to refresh perhaps as the major indices were down modestly in light shortened session. The Dow closed just below 8900 and may make an assault on 9077 next week, barring any major negative fundamental news this weekend. The Nasdaq still seems poised to take out its 200 dma at 1494 and rally towards the next major resistance level of 1568 though there is no guarantee it will make it. The S&P 500 has resistance at 975.
The technical indicators are little changed from Wednesday's close as the major technical indicators such as McClellan Oscillator, stochastics, MACD, DMI (ADX), CCI, Money Flow, Acc/Dist and Aroon are still in positive territory, though a few of them are looking toppy unless we get more "pops."
The sentiment indicators have worsened as too many have become bullish as indicated by the VIX, VXN, put/call ratio, and advisory surveys.
It would appear that we will get a rally next week as the bullish momentum remains. If we rally early next week, that should lead to a correction but if we dip early next week, then we can bounce back up later in the week.
It is wise to watch the market internals during the day and especially in the last hour into the close.
For Friday, the Nasdaq TRIN closed at a mildly positive .80, with a/d of 1/1, u/d vol 8/7, on 800M shares. The NYSE TRIN closed at a mildly negative 1.13, with a/d of 1/1, u/d vol 8/9, on 600M shares.
If this market is forming a topping formation, it is wise to remember that it takes time to complete, especially during favorable seasonality. But if it does get confirmed by bearish divergences, multiple tops, and ensuing price drops, then the decline could be substantial in terms of time and price.
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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