***** Technical Analysis (July 11)*****
As mentioned last week, despite some weakness recently in the Dow particularly, it does not yet appear that the market has run out of rallies, but they are looking less impressive and setting up some bearish divergences which, if they hold, will be vindicated by a major downtrend.
For now, the market appears positive in the short term, as the daily stochastics have crossed up and the Nasdaq McClellan Oscillator has also turned positive.
The Nasdaq MACD, DMI, CCI, Acc/Dist and Aroon remain positive and are joined by the Williams%R and Money Flow today, Friday. The ROC and OBV remain neutral.
Daytrders and very fast swing traders might risk trading this rally but I am not, preferring to sit on the sidelines, awaiting a possible top and reversal. There are some signs of this cyclical bull getting long in the tooth.
Sentiment remains much too bullish and valuations are getting quite high while mutual inflows continue it appears, but as soon as the market makes a lower high or lower low, those inflows could stop abruptly because price movements cause buying/selling as much as buying/selling causes price movements as Richard Ney pointed out almost 3 decades ago when discussing market manipulations by NYSE specialists.
Gold has been flat lately while bonds may be due for a bounce after having dropped sharply the last 3 weeks, but it may be starting a new, long-term bear itself.
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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