***** Technical Analysis (May 28)*****
Technical signals were mixed today as the daily charts showed that the Dow, S&P 500 and Nasdaq closed at higher highs but while overall volume was heavy on the Nasdaq at almost 2.1B shares, stocks couldn't hold most of their gains and reversed late in the session.
The Dow still appears to have a good chance to retest the 9043-9077 level for a multiple or double top reversal formation possibility even though today's action did not follow through very well on yesterday's huge rally. Perhaps it was a pause before another rally on Thursday or Friday to the resistance level of 965 on the S&P 500 and Dow 9000.
The Nasdaq McClellan Oscillator only changed by 2 and the NYSE Oscillator reading changed by only 1, thereby indicating another large move within 4 sessions. Tuesday's large move of 3% on the Nasdaq and 2% on the Dow barely qualified for that large move.
For Wednesday, the Nasdaq/NYSE TRINs were 1.11/1.21, respectively as breadth was positive but up/down volume was not particularly strong, hence the TRIN readings.
The MACD improved to neutral while the ROC and OBV remained negative and the others remained positive. The Nasdaq RSI rose to 66.7 as it tries to reach 70 again.
Some negative divergences are the CCI, Money Flow and the McClellan Oscillators. But the chart patterns of the major indices imply some more upside is likely, at least in the short term, while the intermediate term is more problematic.
Sentiment indicators are mixed but advisors and individual investors are too bullish and stocks should pay the price of this bullishness starting in the next few weeks. The VIX/VXN MACDs and RSIs imply a downtrend is likely soon as well.
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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