***** Technical Analysis (for February 20)*****
So many mixed TA signals are making forecasts for the next day or two very difficult. We have had 2 inside days in a row, a very unusual pheneomenon, which indicates an increasing buildup of market congestion leading to a strong breakout move. The problem is that one can only guess which way it will be. The fact that we have some gaps below and we are still in a bear market may slightly skew the odds in favor of down.
And conventional wisdom says that once the bombs start falling, the market will rally sharply. I would have to factor in whether the market rallies into that event or whether the market declines into it, which is one of the factors in my believing there was a good chance we would not have a Santa Claus rally.
The Nasdaq McClellan Oscillator is at 0, while the 10% index is right at the 5% index, an unusual occurrence and both these readings give a very neutral indication. The NYSE McClellan Oscillator is still negative at -12.
The Nasdaq MACD and DMI remain positive while the Williams%R joined them today. The Acc/Dist worsened to neutral while the CCI and Money Flow remained neutral and the OBV remained negative. The RSI was little changed at 49.3.
The Nasdaq TRIN closed at a neutral 1.08, with a/d of 1/1, up/down volume 13/14, on light volume of 1.3B shares.
The NYSE TRIN closed at a negative 1.71, as the a/d was 15/17, up/down volume was 1/2, indicating some distribution, on light volume of 1.2B shares.
The VIX MACD is crossed down and the VXN MACD is uncrossed, giving slightly positive to neutral readings. The put/call ratio is giving a neutral reading. And advisors are slightly more bullish than bearish.
The slow and fast stochastics indicate that while they are short-term overbought, there is room for more firmness in the days ahead. But bear markets can see these indicators reverse rather quickly from overbought levels rather than staying overbought for a longer time.
The a/d lines and new highs/new lows indicators are giving bearish readings for the trend.
Friday is options expiration so that is another reason why it is very mixed and hard to forecast the direction for the day. The way the market internals set up should provide a good clue as to the day's trend.
Gold held up after having falling sharply in the last 3 weeks but needs to follow through to the upside as the daily stochastics have mostly crossed up.
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.
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