***** Technical Analysis (July 16)*****
The market did not rally Wednesday but did close well above its intra-day lows. The problem is that bears have to be a bit patient as topping formations take time to complete before a trend reversal, which is the most likely scenario in the months ahead.
The Nasdaq Money Flow, Acc/Dist, ROC and OBV are all signalling a possible reversal while the McClellan Oscillators and Summation Indexes, especially on the NYSE, are also weakening.
I have been expecting another rally to retest 9352/1015, but it hasn't happened yet. There is no guarantee that it has to happen as we have seen some retests in the past 2 months and with the exception of the Nasdaq, we see possibly a broadening top formation.
The sentiment indicators are quite negative. The VIX/VXN MACDs and RSIs are warning of an impending decline as they show strong bearish divergences.
With more earnings reports coming out in the next 2-3 weeks, the market could muster up another rally, but the risk now is increasing for those who are long.
Gold is weak (though probably still in a long term bull market and could hold above $320/oz) as are bonds though bonds rallied today after suffering huge losses in the last 3 1/2 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.
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