***** Technical Analysis (for February 13)*****
The good news is that the market staged a late rally after the Dow was down well over 100 points and a follow-through on Friday morning is likely as an oversold rally. But the bad news is that the technical damage is so severe that the bearish momentum will not likely be reversed any time soon.
The Dow reached the support level (7600-7633) at its low of 7628, for the session and then rallied up over a hundred points to close at 7749. The Nasdaq got as low as 1261 before rallying to 1277.
The Nasdaq McClellan Oscillator moved only one point from -36 to -37, which implies a large move within four sessions. The Summation Index keeps coming down and is now -580 while the 10% index is quite negative but not yet at very extreme levels typical of bottoms.
The NYSE McClellan Oscillator is now at -51 with its Summation Index at -193. The NYSE, Nasdaq and Amex a/d lines and new highs/new lows are in downtrends.
The Nasdaq and Dow weekly stochastics are crossed down with plenty of room before getting near zero while the vast majority of technical indicators remain negative for the Nasdaq and S&P 500. The Nasdaq RSI was virtually unchanged at 34 and is clearly in a downtrend.
The VIX and VXN improved slightly as their MACDs are not as crossed up as before, especially the VIX, but those indicators are in up trends, above their moving averages. The put/call ratio rose to 1.18 and may be signalling a bottom within 2-4 weeks.
The market is so oversold that the stochastic "drag" can see a reset, but until panic selling occurs, the indicators will not be extreme enough on an intermediate term basis to signal a strong tradeable bottom.
The U.S. dollar fell sharply today as no surprise and gold firmed up a bit today to increase the odds for a consolidation phase rather than a new bear market in the precious metal.
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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