***** Technical Analysis (June 20)*****
Friday saw a bearish reversal after a modest rally in the morning and mild distribution. The Dow managed a small gain but that was misleading.
The McClellan Oscillators worsened by a little, from -24 to -25 on the Nasdaq and from -40 to -43 on the NYSE, which means their Summation Indexes are declining, a negative sign. The question is whether this weakness is a minor correction, major correction, or the beginning of a major trend reversal back down.
The daily stochastics are crossed down from high levels and that too is negative sign.
But the a/d lines and new highs/new lows readings remain positive, and so do the monthly and weekly stochastics.
I am skeptical of this decline preventing another rally because the Summation Index is at very high levels and it will take time for it to unwind back down, which implies there will be at least minor rallies in the weeks ahead.
But bulls will need to see an orderly and minor correction if there is to be another strong rally in the next couple of weeks.
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.
Dr.Bob no longer hosts Stocktimers meetings on Sunday nights at AOL. |
