***** Technical Analysis (for January 31)*****
The Dow rallied triple digits though not too near its intra-day high while the Nasdaq was basically flat and market internals were positive on the NYSE but negative for the Nasdaq.
According to Yale Hirsch and the Stock Trader's Almanac, "As January goes, so goes the year." But it is not always true so one should always consider it in conjunction with other indications. Technically the market appears to be likely to be weak in the first quarter and perhaps the second as well with the possibility of a rally late in the year due to favorable seasonality if we are oversold at that time.
The Nasdaq TRIN on Friday closed at a negative 1.92 as the a/d was positive at 19/14 but up/down volume was negative at 2/3, indicating mild distribution despite the breadth. The volume was light once again at 1.6B shares. The MACD, Williams%R, CCI, DMI, ADX, Money Flow, and Acc/Dist all remained negative. The Aroon remained neutral. The RSI was virtually unchanged at 39.
The Nasdaq McClellan Oscillator improved to -21 from -36 but that is not very convincing due to the negative TRIN figure today. The Summation Index continues to decline, now at -303. And the 10% index is below the 5% one and the zero line.
The weekly stochastics remain crossed down at 51% and the daily rose to 10% crossed down, which allows it to fall in a day or two from now, from having reset a bit. The hourly is 28% crossed up, implying possible near term strength but it may not get very high before another downdraft.
The NYSE TRIN closed at a mildly positive .87, with a/d of 23/9, up/down volume 3/1, indicating modest accumulation, but on light volume of 1.5B shares. The McClellan Oscillator improved to -20 while its Summation declined to +126. The Dow weekly is acting much like the Nasdaq's and is crossed down as is its dailies at 14%, while the hourlies are crossed up at 55%.
The VIX and VXN MACDs are still crossed up and their raw readings were little changed. The put/call ratio remains in negative territory as far as its MACD is concerned. Advisors are 50% bullish vs. 26% bearish, so it worsened and indicating that a bottom is not near.
The market had broken down technically and bounces are unlikely to turn into strong rallies until we trade much lower and experience some kind of panic selling or capitulation in all probability. The Dow is not likely to hold 7950 support nor the Nasdaq at 1300 in February. Resistance for the Nasdaq is at 1360, 1380 and 1400, so it has a lot of work before getting bullish momentum.
The U.S. dollar has been rallying a bit lately and gold has stalled out in the past couple of weeks as well, but both may reassert their primary trends starting this week.
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.
NEW TIME Announcement: Dr.Bob hosts Stocktimers meetings on Sunday nights to discuss the end of week Market Analyses, especially Technical Analysis, at AOLs private chat room, from 6-7 pm PST. The Stocktimers AOL meeting starts off in the private chat room, and then may go into the regular rooms for more capacity. Just Instant Message Drbob512 to locate him.
|
