***** Technical Analysis (for March 28)*****
Barring major war news, which is not unlikely, the markets technical condition weakened from Friday's lower close. The Nasdaq has closed below its opening 3 out of the last 5 sessions, a negative, but is it a resetting before another rally or is it a sign that the up trend has reversed?
There was distribution on Friday as the Nasdaq up/down volume was weak at 2/5, while a/d was 7/8, making a TRIN of 2.36, on light volume of 1.35B shares. The MACD is just barely positive and one more down day could turn it negative, while the DMI, Money Flow and Acc/Dist also weakened and are still positive. The Williams%R, CCI, ROC, OBV and Aroon remain neutral. The RSI fell to 53 and is threatening to turn negative below 50.
The Nasdaq McClellan Oscillator dropped to +18 and its 10% index remains above the 5% one. The Summation Index rose to -338. The weekly stochastic is at 43% crossed down, daily 67% crossed down, hourly 7%, so unless the index rallies in the next day or two at the latest, the trend may have reversed back down.
The NYSE TRIN closed at a negative 1.49, with a/d of 17/14, up/down volume 5/6, on 1.2B shares. The McClellan Oscillator changed by only 1 to +27, implying a large move within 4 sessions. The Summation Index rose to +50.
The VIX and VXN MACDs are crossed down still despite the decline this week which is a positive sign. The put/call ratio rose sharply to 1.31, which can be interpreted positively but sometimes it has a delayed signal from a contrarian standpoint.
Usually high readings accompanied by a high moving average reading means that the market is oversold and due for a rally as there are too many put buyers at market bottoms. But there can be a delay before this happens and sometimes the put buyers are right for a short time. The put/call ratio's MACD is giving a neutral signal now.
Investors Intelligence shows 47% bullish advisors vs. 33% bearish ones, a negative sign. While this is also not a very short term timing tool, it does imply that in the short-intermediate term of 2 weeks to 2 months that there is higher risk to bulls.
The Dow has traded in a narrow range for several days between 8100 and 8400, with support at 7950 and resistance at 8521-8600. The Nasdaq has a gap above at 1403 but also below at 1221 and 1166.
The market has not been acting very well this week raising the question if the top is in or if we can retest it after this resetting decline ends.
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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