***** Technical Analysis (for December 2)*****
Last week I had estimated that the high for the week and possibly for this rally would be around 9077 on Friday, but the Dow didn't get there, leaving me to believe it would happen early this week. The Dow reached 9043 and then reversed back down sharply, and now the question is whether that was the top.
For Monday, the NYSE TRIN was a neutral .97, with a/d of 9/7, up/down volume 17/13, on 1.5B shares, which leads me to believe that we will rally once more this week, to at least 9043, but that is will be moribund. The Dow daily stochastic is 75% coming down but not yet crossed down, and hourly is 49% crossed and going down.
The Nasdaq TRIN closed at a mildly positive .87, with a/d of 17/16, up/down volume 5/4, on 1.9B shares, so this too implies that the rally is not quite over. The McClellan Oscillator was +30 and it dropped just 5 points but is perhaps looking toppy. The other Nasdaq indicators are mostly positive while the ROC and OBV are neutral.
The sentiment indicators remain negative and some of them such as the put/call ratio worsened. The VIX and VXN have MACD's that are in the process of crossing up, a negative sign.
The Nasdaq remains the relative strength leader and may retest the 1520 resistance level and possibly the 1568 level, while the S&P 500 may retest the 965 resistance level. Only the Nasdaq has reached its 200 day sma and it did not close above it today.
The rally appears to be developing a topping formation rather than starting a new bull market. I still expect to see a lower high on the major technical indicators to signal the next major downdraft which probably will start in December, with an outside chance of starting in January instead.
Spot gold and the $HUI appear to have a little more downside action before making another assault on the $325-328 level late in December or in January.
Bonds appear to be in a trading range with the possibility of rallying again in the first quarter of next year and the US dollar is probably in the early stages of a major downtrend.
All in all, it pays to be a trader, short and long, rather than a LTBH investor.
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.
|
