***** Technical Analysis (for March 20)*****
The market is finally looking a bit tired as it could not close strongly today but it did close above its opening prices on the major indices. Profit-taking and some selling after a strong week should take place on triple-witching Friday tomorrow.
The question is whether this rally can continue next week as the technical indicators are overbought and there has not been a pullback of significance. Based upon war emotions, perhaps this rally can last another week or two, but based upon fundamentals and longer term technicals, this rally is just a technical rally within a bear market with most of the gains already made in all likelihood.
For Thursday, the Nasdaq TRIN was a mildly positive .77, with a/d of 17/14, up/down volume 19/12, on light volume of 1.6B shares. The MACD, Williams%R, DMI, CCI, Money Flow and Acc/Dist are positive, with several of them very positive, indicating strong positive momentum, which is not likely to end without a little more time in positive territory. The RSI is 64.9, which is nearing the toppy 70 area.
The Nasdaq McClellan Oscillator rose to +35 from +31, and a large move is still expected now within 3 sessions after the small or no change in its reading. The 10% index is well above the 5% index now, a positive reading. The monthly stochastic is 27% crossed up, weekly 55% crossed up, and daily 94%, so momentum is positive.
The NYSE TRIN closed at a neutral .90, with a/d of 18/13, up/down volume 8/5, on light volume of 1.4B shares. The monthly stochastic is 31% barely crossed down, weekly 53% crossed up, daily 96%. The McClellan Oscillator is also +35 and its 10% index is well above the 5% one.
The VIX and VXN are giving mixed signals while the put/call ratio is negative. Advisors are still more bullish than bearish.
The stochastics did not have the expected "stochastic drag" that would have indicated panic selling and possibly capitulation 1-2 weeks ago, and now they may have a bit of "stochastic pop." The tape is positive right now, especially if we have a pullback on Friday, and we could see the market fight its way up a little more towards Dow 8600 and Nasdaq 1460 in the next week or two, though choppily, if there are more dip-buyers on geopolitical/war news.
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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