***** Technical Analysis (for March 4)*****
The markets couldn't sustain any rally today as the Dow fell sharply while the Nasdaq dropped more mildly. The December outside month has been followed by January and February being down and now March could see a retest of the Dow 7197 and Nasdaq gaps filling at 1221, if not 1166. The S&P 500 should see a break below 800 as well.
The Nasdaq McClellan Oscillator dropped below the zero line once again, this time to -3, while the 10% index is just a bit below the 5% one. The weekly stochastic is 34% crossed down and the dailies have weakened and could cross down with one more down day.
The Nasdaq TRIN closed at a negative 1.86, with a/d of 3/5, up/down volume 1/3, on light volume of 1.2B shares. The MACD finally worsened to neutral while the DMI and Acc/Dist also turned negative. The Aroon and OBV are still negative while the Williams%R, CCI, and Money Flow remained neutral. The RSI dropped to 45.
The NYSE TRIN closed at a very negative 3.68, with a/d of 11/20, up/down volume 1/7, indicating strong distribution, on light volume of 1.2B shares. The weekly stochastic is 5% crossed down and daily is 14% crossed down.
The VIX and VXN MACDs are still crossed down but narrowing the gap. The put/call ratio MACD gives a negative reading. Advisors are still a little too bullish.
The Nasdaq has been relatively stronger than the Dow and S&P 500 recently but it may finally break down in the next week to join the Dow. The Dow should see a test of 7628 after any technical bounce fails in the next day or two, and the Nasdaq gaps at 1221 and 1166 await their fills.
If the Dow and Nasdaq cannot close strongly on Wednesday, then many of the technical indicators could turn negative or more negative, such as the McClellan Oscillator, Money Flow and DMI. And one more weak day will cause a "double cross" on the slow stochastics, which could seal the fate of the major indices for the next major move down.
The Dow, S&P 500 and Nasdaq have very little support and the downside acceleration may begin soon. It will probably coincide with the "generals" breaking down, such as MMM, PG and IBM.
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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