***** Technical Analysis (May 2)*****
Bear markets can have periods of time when the charts in the shorter term and technical indicators appear to have reversed into a bullish trend while actually forming a large resetting pattern that fakes out most market participants.
The question right now is whether that is occurring or if, as most Wall Street analysts are purporting, the stock market has started a new bull market, either cyclical or secular.
The jury is out as the chart patterns and technical indicators are mixed in the intermediate term, bullish in the shorter term, and bearish in the longer term still.
On Friday, the major indices rose sharply but not quite sharply enough to qualify as the large move as portended by the small moves in the McClellan Oscillators during the past week.
The Dow closed above the 8522 resistance level and is within the range of 8522-8600 that was discussed while the Nasdaq is very near its resistance level of 1521 now.
The Nasdaq TRIN closed at a very positive .37, with a/d of 22/9, up/down volume 6/1, indicating strong accumulation, on moderate volume of 1.8B shares, which is higher than recent average volume.
The MACD, Williams%R, DMI, CCI, Money Flow, and Aroon remained positive while the Rate of Change worsened to negative, showing a short term bearish divergence, which is usually a leading indicator by 1-3 weeks. The CCI is also showing bearish divergence. And the RSI is at an extreme 69.8 level now.
The Nasdaq McClellan Oscillator rose to +46 and its 10% index is at an extremely high level. The stochastics are all overbought and need very strong internals to maintain those lofty levels.
The NYSE TRIN closed at a positive .62, with a/d of 7/2, up/down volume 5/1, indicating strong accumulation, on moderately light volume of 1.5B shares.
The NYSE McClellan Oscillator rose to +47. The Dow weekly stochastic rose to 80%, daily 97% crossed up, hourly 92%.
The market indicators are positive though not strong enough yet to indicate another leg up is in the works but rather that we are nearing a possible top, to be followed by at least a correction.
The strong positive momentum this past week implies more strength early in the week is possible but the market could turn back down any day now as the readings are at extreme levels.
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.
NEW TIME Announcement: Dr.Bob hosts Stocktimers meetings on Sunday nights to discuss the end of week Market Analyses, especially Technical Analysis, at AOLs private chat room, from 6-7 pm PST. The Stocktimers AOL meeting is in the private chat room. Or you may Instant Message Drbob512 to locate him.
|
