***** Technical Analysis (for February 10)*****
The market enjoyed an "oversold" rally today as the major indices reversed up after weak early morning action. Selling dissipated today after the past 4 weeks of declining stock prices, which is the good news for the bulls but the bad news is that it is only a reprieve because we haven't seen the inevitable panic selling necessary to get the indicators to indicate a capitulation bottom.
The buyers who are buying on a dip may be trying to "catch a falling knife" because the market can reverse back down quickly and emphatically.
For Monday, the Dow rallied modestly to 7920 and may find resistance at 8,000 and then at 8150 and 8250 if it can get that far. The Nasdaq closed just 4 points from 1300 and may find resistance at 1310 (trendline) first, and then 1360.
The Nasdaq TRIN closed at a very positive .36, with a/d of 17/14, up/down volume 3/1, indicating moderate accumulation, on very light volume of 1.2B shares, thus the rally is not impressive technically.
The Nasdaq technical indicators are virtually unchanged, at negative , and the RSI rose to 38. The McClellan Oscillator improved to -29 while the Summation and 10% index are still very negative. The weekly stochastic remains crossed down, while the daily is starting to cross up from low levels, so the rally could continue for a couple or few days from this indication.
The NYSE TRIN closed at a positive .65, with a/d of 9/7, up/down volume 2/1, on 1.2B shares. The McClellan Oscillator improved to -34, while the Summation continues downward, too.
The sentiment indicators are still giving negative signals, especially the VIX, VXN, and investment advisors survey.
The rally today could extend to tomorrow's early morning action because we finished firmly today, but it might not last to the end of this week, wherein it may continue the intermediate term downtrend.
The Nasdaq had a 61.8% retracement level of 7924 that was broken on Friday's close, thus indicating that we will eventually retest 1108 on the Nasdaq and probably the 7197 level on the Dow.
Gold was sharply lower as profit-taking occurred from "good" news related to geopolitical issues were announced today, and support at 359 and 355 (50 dma) need to hold for the up trend to remain intact.
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.
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