***** Technical Analysis (for November 7)*****
The Dow now has a short top double top near the 8770 area after today's reversal back down and the Nasdaq has failed to take out the 1426 prior high and filled part of the gap by trading to 1371, 11 points from the gap bottom. The S&P 500 closed at 902 and needs to find support here or risk a more serious decline.
The short-sellers need to see a follow-through decline on Friday to confirm today's drop but the internals will provide a clue to whether the bulls can pull another rally rabbit out of the hat.
Today the Nasdaq TRIN closed at a negative 2.55, with a/d of 1/2, up/down volume 1/5, on modeerately light volume of 1.8B shares. The RSI dropped to 60.7 after reaching a recovery high of 69.1 yesterday, very near the 70 level that is sometimes associated with tops.
The Nasdaq Williams%R was the only technical indicator that turned neutral from positive, while the Rate of Change remained negative. The daily stochastics have now crossed down from very high levels. The Nasdaq McClellan Oscillator dropped sharply to +38 from +64, but the 10% index remains quite positive.
The NYSE TRIN closed at a negative 2.29, with a/d of 11/21, up/down volume of 1/4, on 1.45B shares. The McClellan Oscillator dropped to +37. The Dow daily stochastic also crossed down at 86%.
The VIX/VXN rose a little to 35.3/53.9. The put/call ratio rose to .88.
The market has looked a bit weak lately and today's decline may be the start of another downdraft, though it will probably be choppy with some technical bounces along the way. The bulls are not likely to give up easily. The Dow could rally back up to the 8675 and the Nasdaq could attempt to reach the 1400 level again, but most of the rally may be past us now.
Technically the market has been appearing to be in a topping formation and the odds have now gotten to favor a failure to reach the prior Dow high of 9077. The Nasdaq made a double top near 1420-1426 and a failure to take that out in the next few days would be a harbinger of significantly lower prices to come.
Ultimately the Nasdaq gaps below are likely to fill and a retest of 1108 is also likely in the months to come. The Dow and S&P 500 are also to eventually retest their lows as well at 7197/768, respectively.
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.
NEW TIME Announcement: Dr.Bob hosts Stocktimers meetings on Sunday nights to discuss the end of week Market Analyses, especially Technical Analysis, at AOLs private chat room, from 6-7 pm PST. The Stocktimers AOL meeting starts off in the private chat room, and then usually goes into the regular rooms for more capacity. Just Instant Message Drbob512 to locate him.
|
