***** Technical Analysis (for April 9)*****
Correction: I stated in one of last week's TA Updates that eventually the Dow could fall sharply to almost 1,000 points in a day, but that is not possible with the exchanges trading curbs and halts. But the Dow could "crash" over 1,500 points in a week, though I am not saying that it has to.
Today, the Nasdaq filled its gap below at 1358, and now a real test of the resilience of the war rally is at hand. The S&P 500 is at the old support/resistance level of 865. The technical indicators have weakened substantially and they have been here before, resulting in rallies. We shall see if they bounce up again or if the downtrend will extend for weeks.
The Nasdaq TRIN closed at a very negative 4.62, as a/d was 12/17, while up/down volume was 1/6, indicating moderate to severe distribution, on light volume of 1.3B shares. The MACD finally moved off of the neutral level and is now slightly negative, as did the Williams%R, to join the Acc/Dist, ROC, and OBV, to give negative readings. The DMI and Money Flow remained positive but less so, while the Aroon remained positive. The CCI remained neutral but is also weakening. The RSI fell to under 50 at 48, so the market will either rally enough to get it above 50 or we shall see follow through to the downside in the next day or two.
The Nasdaq McClellan Oscillator dropped to +12 and its 10% index is just above the zero line and the 5% index. The Summation Index rose to -147, as it tries to reach the zero level.
The Nasdaq monthly stochastic is 25% crossed up, weekly 38% crossed down, daily 58% crossed down, hourly 0%, so a bounce here seems likely.
The NYSE TRIN closed at a negative 2.14, with a/d of 14/17, up/down volume 2/5, indicating modest distribution, on light volume of 1.3B shares. The Dow monthly stochastic worsened to 28% crossed down, weekly 48% sideways, daily 70% crossed down slightly, and hourly 0%.
The VIX and VXN MACDs are crossed down still, giving positive readings. The put/call ratio dropped to .74 with a neutral MACD. The advisors are much more bullish than bearish, giving a negative reading.
The slow and fast stochastics have triple crossovers to the downside now and by that alone, it is a bearish harbinger.
But the market has been able to stop the declines from accelerating recently, and the McClellan Oscillators are still in positive territory, though not by much.
If the next rally is mediocre, look for a major sell off starting afterwards, and companies that are losing money should lead the way down.
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.
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