***** Technical Analysis (February 11)****
The blue chips lead a reversal after a mid-week low and has preserved the McOsi above the zero line for now. The Nasdaq reading is +12, in a very precarious position, while the NYSE number is +26. The last two Friday's have seen positive action and last Thursday's bullish key reversal saved the day for bulls, as the market was teetering on the brink of another leg down.
Stochastics and MACDs are all looking positive now along with moving averages. A "double cross" in these two and the Summation Index (or a failure for the Summation to turn positive as it rallies to the zero line) and more bearish divergences showing up during the next failed rally could confirm that the top is in and that we will see a series of lower highs and lower lows for the next 2-3 quarters.
The a/d line and new highs/new lows are still weaker for the Nasdaq than the NYSE, a negative sign. If they should fail to make a higher high during the next major rally, it could cement the fate for stocks this year.
The sector that continues to look positive right now is the energy sector but it is getting parabolic. Crude has traded within a narrow range of 45-49 for some time now, and needs to rally strong to break out above 50 or risk another decline to 44 or possibly 40. The longer term trend is bullish of course. Energy stocks will keep reporting positive earnings as long as spot crude stays above $35/barrel and natural gas above 5.
Gold finally broke to the upside late in the week, and its daily stochastic has crossed up, a bullish signal, which needs confirmation and follow-through if it is to be a bona fide short-intermediate term move up. Monday or Tuesday could see some consolidation of the sharp rise on Thursday and Friday. A drop in the USD would help gold and silver rally.
The USD looks tired and has not been able to rise above 85 1/2, and may be risking a decline to test its 80 level if it does not get a head of steam very soon. Its daily stochastics have crossed down and the Feds may not raise the Fed Funds rate more than 2-3 more times, thus taking away the support for the dollar.
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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