***** Technical Analysis (for February 28)*****
The slow and fast stochastics crossed back up, thus signalling a possible rally early this coming week. If we do not obtain a heavy volume rally though, they will cross back down later in the week or so, which will be a very bearish "double cross."
For now, the technical indicators have strengthened. Friday's action has improved the Nasdaq/NYSE McClellan Oscillator to +12/+22, respectively, and have turned the Williams%R, Money Flow and Acc/Dist to positive, and the MACD became more positive for the Nasdaq dailies.
The VIX/VXN MACDs are crossed down, a positive reading. The put/call ratio's MACD are very extreme, giving a negative reading. The advisors are still slightly more 40% bullish vs. 36% bearish, so it is slightly negative. As is usually the case, the sentiment and technical indicators are mixed, especially for the short term.
The weekly stochastics are crossed down still but narrowing the gap while the dailies are crossed up but not too strong. The settings are different for the standard stochastics versus the slow and fast stochastics at stockcharts.com, thus giving different readings and signals.
The Nasdaq is nearing the 200/50 dmas, 1354/1370, and the 1370 should provide some resistance, as will the 8050 and 8150 levels for the Dow. Dow 8250 should be pretty strong resistance.
Most e-wave counts indicate that the rallies from the early December highs are corrective ones while the main moves will be impulse waves down. But there are many interpretations as to the short term and minor waves. There is a general consensus however that the Grand Supercycle ended in early 2000 and that we are not done having major and minor waves down.
On Friday, the Nasdaq TRIN was a very positive .34, with a/d of 16/15, up/down volume 3/1, indicating accumulation on selective issues, on light volume of 1.3B shares.
The NYSE TRIN was a mildly positive .86, with a/d of 3/2, with up/down volume 8/5, on 1.3B shares.
Monday is more likely to see a strong morning session and if the internals are quite strong, then the day should be up. The question is how long the rally can last when the overall technicals and sentiment indicators are negative.
Bonds have rallied once again, and interest rates are at 40 year lows. The U.S. dollar is in a trading range between 98 and 101 for March futures contracts but it will reassert the bear market downtrend soon. Spot gold and gold stocks have been in a sharp correction and it could be argued that it has been a major correction within a bull market. Support is in the low 340's.
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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