***** Technical Analysis (for February 24)*****
The major indices are flirting with disaster once again, after falling on the first session of the week. The Dow has had difficulty even rallying to resistance levels while the Nasdaq has been relatively stronger than the Dow and S&P 500, but it too was down today.
The McClellan Oscillator fell back down today to -1 and -7 on the Nasdaq and NYSE, respectively, and the risk is to the downside because of the low Summation Index readings. The Nasdaq RSI fell below 50 again while the OBV and Aroon remain negative. The MACD is the sole indicator that is positive, and the others (Williams%R, DMI, CCI, Money Flow, Acc/Dist) are neutral.
Weekly stochastics are crossed down while the dailies are crossed up but weakening. The monthly stochastics are mixed while the slow and fast stochastics are rolling over.
The Nasdaq and generals (such as MMM, IBM, P&G) need to fall apart before we find a bottom. Sentiment is not helpful either with the put/call ratio's MACD getting negative again and the VIX and VXN are far from positive levels. The advisors are still too bullish.
Bears are having to be patient as the market has whipsawed above and below 8,000 in the past month, but 7628 and probably 7197 should get retested in the next few weeks. The gaps below for the Nasdaq also loom ominously.
Bulls believe the lack of follow-through selling recently is positive while the bears believe that the lack of rallying to resistance levels bodes badly for stocks.
In the final analysis, the tape does not lie, and all charts of indices are bearish on almost all timeframes. Technical bounces will always occur and for now, they continue but in may not be long now before we see real panic selling or at least a resumption of the more severe downdrafts.
Gold continues to try to recover and needs to close above 359 very soon to increase the odds for a stronger rally, but many gold stocks are lagging still. Their stochastics crossed back down and need to crossover again for a double cross if the bullish trend is to reassert itself.
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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