***** Technical Analysis (May 5)*****
The market paused today after almost 2 months of rallying, with the more speculative stocks leading the way recently. The Nasdaq reached 1519 intra-day today, just two points from its prior recent high and resistance, as this index continues to have relative strength.
The Nasdaq McClellan Oscillator changed by only 1 point to +45 from +46, thereby signalling a large move once again. There has been a lot of "congestion" in this oscillator in the past 6 sesions. The 10% index is quite extreme.
The Nasdaq TRIN closed at a positive .55, with a/d of 17/13, up/down volume 2/1, indicating mild accumulation, on moderate volume of 1.9B shares, the highest in some time. Perhaps we're getting closer to a heavy volume rally, or if we stall out here, it might indicate distribution at the top.
The Nasdaq RSI rose to 70.0, an extreme reading, and most of the other technical indicators remain positive. The DMI is at an extreme level while the Money Flow is not as positive as one would expect considering the strength and duration of this rally. The stochastics remain overbought.
The NYSE TRIN closed at a neutral 1.07, with a/d of 9/7, up/down volume 7/6, on light volume of 1.4B shares, as most of the action was on the Nasdaq today. The McClellan Oscillator declined to +42 from +47.
The VIX MACD remains crossed up while the VXN MACD remains uncrossed. The put/call ratio was little changed at .73 with a MACD that is slightly negative. Investors Intelligence has bullish advisors at 48% vs. 29% bearish ones, a negative reading.
The market has been impressive for the bulls for almost two months now and technically the most impressive has been the breadth and breadth momentum.
It would seem that at least a correction is due because we are overbought with some extreme readings, but the momentum might be strong enough to limit any pullbacks in the near term. But technically the market may be weaker in the months to come.
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.
|
