***** Technical Analysis (Dec. 3)****
The bullish technicians note that the Nasdaq finally had 3 consecutive days of heavy volume rally days, which last occurred in May, 2003, leading to a 8 month rally. That is not likely to occur this time, however.
On the negative side, there are a few bearish divergences starting to show up, such as the Rate of Change, 10% indexes on the McClellan Summation, and the VIX/VXN MACDs, which are uncrossed.
At some point, the weekly stochastics, Summation Indexes and RSI will wind back down from their lofty levels but the market averages should enjoy some more firmness in the near or short term. First a near term pullback and then another rally, leading to the unwinding and choppy downtrend could occur.
The bond market has shown some signs of vulnerability on the heels of the recent dollar collapse and may have started a new cyclical bear market.
The USD is due for a technical rally while bond yields have a higher trading range now, between 4.2% and 4.4% (10 yr note) but will ultimately break out above 4.4%.
Gold remains in its uptrend and is overbought for the short term and at risk of a significant correction.
Crude oil fell sharply this week and closed at about 42 1/2, with technical support at 38 and psychological support at 40. Energy stocks will need to show bullish divergence when the crude price drops further in the next week or so. But this decline may be a correction within a secular bull market and a buying opportunity for those with long time horizons.
Dr.Bob's commentaries are not to be construed as recommendations to buy or sell stocks, options, or ETF's as Dr.Bob is not a Registered Investment Advisor. 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 interpretation.
Dr.Bob's mission is to teach Technical Analysis and demonstrate a structured approach to Market Analysis, for position and swingtrading. There are many other TA structures, strategies and systems.
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