***** Technical Analysis (week ending July 30)****
The markets were up this past week with most of the internals and technical indicators improving. The Nasdaq continues with its "cross of death," but its McClellan Oscillator turned positive at +5 and the stochastics have crossed up for the dailies. While this technical bounce could turn into a technical rally for a week or two, a major move down is now portended in the months to come.
The Nasdaq monthly stochastic rose to 70%, crossed down. The weekly improved to 23% crossed down, daily rose to 27% crossed up, and the hourly is 87% crossed up.
The Williams%R, MACD, CCI, and Acc/Dist improved to neutral, while the DMI (ADX), Money Flow and Aroon remained negative. Usually when the Aroon just turns negative, it has been after a steady decline and a technical bounce is due, before more weakness occurs.
The Dow monthly stochastic rose to 81% uncrossed now, weekly rose to 36% crossed down, daily rose to 42% crossed up, and hourly rose sharply to 85% crossed up. The NYSE McClellan Oscillator rose sharply to +1.
We've seen a complex topping formation since January and February that will lead to a major move down in the months to come. Perhaps we will see a 10-15% decline by September-October and then a late year rally to be followed by another decline early next year, as the Kondratieff Winter continues for stocks, and expands to bonds being weak (temporarily, before deflation occurs in earnest) and real estate.
A mini-crash has already started in the Nasdaq and may be joined by the other indices in the weeks and months to come, after this technical rally runs out of steam. Only heavy volume rally days would change this scenario.
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. There are many other TA structures, strategies and systems.
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