***** Technical Analysis (July 8)*****
The Nasdaq led the way again as investors appear to favor growth stocks vs. value stocks as they have since the March lows.
The overall volume picked up to 2.0B/1.5B for the Nasdaq/NYSE, respectively and needs to increase even more if this rally is to stick.
The Rate of Change for all indices are giving a negative reading while the OBV is giving a negative reading for the Nasdaq.
The McClellan Oscillator readings are +21/-2 for the Nasdaq/NYSE, and needs to prove that it won't provide the Summation Index with bearish divergence readings for this rally. The MACDs are slightly positive but not at their recent highs, a negative divergence so far.
The retest of the Dow/S&P 500 at 9352/1015 can still occur this week as pullbacks may be short-lived until we get there.
Since last October and this past March, we have experienced a cyclical bull within a secular bear market in my estimation, and if so, then this rally shouldn't last many months more.
August to October may see a different trend if this rally does not have heavier volume and if many bearish divergences show up as we retest resistance levels of 9352/1015 or as we break out just above those levels. It appears the 1015 level will be broken and earnings reports may be excuses to raise the Dow above resistance.
Price/earnings ratios and other fundamentals are pretty negative now as prices are lofty. But as long as mutual fund inflows remain high as they have been lately, the market can trade in a high range.
Gold has been a bit weak lately while bonds have just been doing terribly for 3 weeks and may be due for a bit of a bounce, though the 10 year bond rates of 3.11 may have been the final bottom 3 weeks ago.
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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