***** Technical Analysis (August 5)*****
Not surprising the market broke down more technically today, and fell through support levels. The Dow is the only one that did not fall below what is considered psychological support of 9000.
The technical indicators are so oversold now that a technical bounce can occur on Wednesday morning and with positive internals it could last for a day or two. But the technical damage is severe enough to increase the probability that a trend reversal has now taken place.
The Nasdaq and NYSE McClellan Oscillators are in the range now when modest resets occur. The same is true for the hourly stochastics and parabolic reading from the EMA's.
But make no mistake about it: the path of least resistance remains down, as it has been for most stocks in the past month. The difference is that the decline has accelerated for many of them.
The Williams%R, DMI (ADX), CCI, and Money Flow worsened to negative and the Acc/Dist remains negative along with the MACD and ROC.
The VIX/VXN rose moderately to 24.11/34.2 and their MACDs are crossed up. Their RSIs and MACDs have been giving bearish divergence readings for a few weeks, and those bearish signals were in direct contrast to the raw readings for the VIX/VXN.
Now we shall see how this decline shapes up in the next 1-2 months, as a downtrend is now the most likely 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.
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