***** Technical Analysis (for November 5)*****
Stocks rode a roller coaster ride today as the indices were down early, rallied, then were down for a couple of hours, and made a late run to finish the Dow up over 100 points and gave modest gains for the Nasdaq and S&P 500. The failure of the bears and short-sellers to precipitate a sharp selloff today when they had the chance increases the odds for another bounce or rally on Wednesday.
While the gap on the Nasdaq at 1360 remains open, it may not get filled as quickly as thought now that we had another firm close. Technical indicators are positive enough on balance to stretch this rally out.
The Nasdaq TRIN closed at a mildly negative 1.16, but it was much worse for most of the session. The a/d was 1/1, up/down volume 7/9, indicating mild distribution but that figure was much improved from the worst levels of the day when it was worse than 1/2. The overall volume was moderately light at 1.7B shares.
The rate of change was the only indicator that is negative, and eventually it will be borne out by a downdraft if it continues to be negative. The RSI rose slightly to 67.3 and the McClellan Oscillator dropped to +58 but the 10% index is still very positive. The daily stochastics remain ready to cross down from very high levels.
The NYSE TRIN was a mildly positive .83, with a/d of 16/15, up/down volume of 7/5, on light volume of 1.3B shares. The McClellan Oscillator dropped to +50 and its 10% index is still positive enough to warrant another round of buying.
The advisors are too bullish at 43% while bearish ones are only 28% and if this stays this way, in a while we could see lower prices. The VIX/VXN were little changed at 34 and 51, and their MACDs are still more indicative of a top than a bottom.
The Dow resistance levels are at 8762, 9000 and 9077 while the Nasdaq has them at 1426 and near 1500. Support for the Nasdaq may be at the 1360 gap fill area and then 1320. And the Nasdaq remains at risk of forming that multiple day island gap 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.
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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