***** Technical Analysis (June 17)*****
While I was gone to a financial convention in San Francisco, the market had some wild gyrations on Friday and Monday, first down, then up substantially. The resistance levels, market internals, and breadth and breadth momentum indicators appear to support higher prices yet.
The Dow appeared poised to reach at least 9400 after 9077 was broken on a closing basis, and now there is talk, or hype of Dow 10,000 due this Summer. If volume can average 2.2B shares on the Nasdaq and 1.7B on the NYSE on rally days, then we could indeed see much higher prices.
There are a few bearish divergences but the Summation Index and stochastics indicate such strong positive momentum that it greatly reduces any chance of a sharp bearish reversal, and it will take time before these can unwind back down.
The Nasdaq has little resistance until the mid-1700's on the weekly chart, and the Dow should see 9400-9500 in the next week or two, after some profit-taking the next few days.
While some indicators are not bullish, such as sentiment indicators, the tape is telling us that there is still some demand left for stocks, perhaps due to the recent fund inflows.
The McClellan Oscillator has weakened as the Nasdaq/NYSE readings are at -1/0, respectively despite the new highs today, so that may be a warning sign, perhaps an early warning sign with some lead time.
Gold continues to rally and may accelerate a little now as it has reversed after the recent correction.
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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