***** Technical Analysis (June 24)*****
Traders and investors were preoccupied with the FOMC move today, as a 1/4 point Fed Funds cut to 1% is the lowest in 45 years! The question is what does this mean for the stock market in the weeks to come, and the answer is probably not much.
The market technicals have weakened and the recent action has made it oversold in the shorter term, probably leading to a technical rally in the next week as sellers take some time off. But the next rally needs to be strong technically, otherwise, a new downtrend could occur.
Right now the MACD, ROC, Williams%R and Acc/Dist are negative while the DMI and Money Flow are barely positive. The Aroon remains positive, and the RSI for the Nasdaq has dropped to the neutral 50 level.
A sharp decline is very unlikely to occur right after a strong, intermediate to long term rally has occurred, even in a bear market. And topping formations are complex and take a long time usually.
So unless we get a heavy volume rally the next time we do rally, it could indicate distribution rather than accumulation. And sentiment indicators are interpreted as negative and have been for some time, ultimately and eventually to be vindicated as a good signal.
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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