***** Technical Analysis (July 17)*****
Today's decline was severe on the Nasdaq while modest on the NYSE and for the Dow and S&P 500. Friday is likely to see an early morning rally as the hourly stochastics are oversold and Friday's typically reverse the earlier week trend in either profit-taking or in dip-buying/short-covering.
The action of the market has finally weakened the a/d lines and new highs/new lows, and a weak rally in the next 2-3 days would provide more evidence of a topping formation to be followed by a major trend reversal.
There is increasing evidence that we may see a top in July with a series of lower highs and lower lows to follow. The MACDs are no longer positive but rather are neutral and could turn down very soon even if we get a technical bounce on Friday.
The Nasdaq McClellan Oscillator fell sharply to -35 from -3 and the NYSE Oscillator declined to an extreme reading of -73 from -49. I mentioned yesterday that the better performance by the Nasdaq Oscillator boded badly as it showed that more speculative issues were outperforming.
Let's see what the technicals look like in any rally attempts. Unless they are very impressive in terms of volume and breadth momentum for several days, it appears that the trend has reversed for this cyclical bull rally within a secular bear market.
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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