***** Technical Analysis (Sept 6)****
This is an new TA update.
Wednesday saw a sharp decline where the internals were worse than the Dow or S&P 500.
The NYSE a/d was 1/4, u/d volume was 1/4, on heavier volume of 2.3B shares, resulting in a distribution day.
The Nasdaq a/d was 1/3 with u/d vol 1/7 (indicating moderate distribution), on moderate volume of 1.8B shares.
The Nasdaq/NYSE McClellan Oscillators were also sharply lower at +20/+5, and now at risk of turning negative unless the market breadth can reverse back up on Thursday or Friday.
Daily stochastics turned decidely negative today after having been staying at very high levels, very bearish.
Today's sharp decline was worse than one might expect from a modest correction from overbought levels, and thus may portend lower prices in the weeks to come. Perhaps yesterday was an important top: we shall know by next week, if not sooner, quite possibly. If you check the weekly NAS Summation and MACD, it shows the market has reached overbought levels and has corrected the large move down, unless we see heavy volume rally days very soon.
Crude oil was weak again and remains in a downtrend, while gold took a breather but appears to remain in an uptrend, and that may accelerate if the USD starts to decline.
I had thought that after a mild correction that the market would rally back up to new recovery highs, but now the odds may have tilted towards a bearish reversal lasting at least 1-2 months, having started today.
Thursday's market internals and closing strength/weakness may determine the next short-intermediate term trend for the next 2-8 weeks.
Below is a link to the DMI(ADX), slow stochastics and StochRSI:
stockcharts.com
See the indicators below:
stockcharts.com[m,a]waclyyay[pc30!c20][vc60][iud20!ua12,26,9]
Be sure to use the advantages of the "top-down" approach, a paradigm in technical trading. The bottoms-up approach refers to the idea that market timing is not used and that the goal is to select strong companies from a fundamental standpoint to buy and hold.
The "top-down" approach refers the the idea that one first ascertains the trend of the market, the strongest or weakest sectors for that trend, and the strongest or weakest stocks within those sectors, to trade, all with the trend.
For breadth momentum charts, see the chart link below and modify it:
stockcharts.com
(change this chart to $compx, weekly charts, and change the lower settings to slow stochastics, macd, and Williams%R to get the best chart)
The Nas weekly Summation-related charts are below:
stockcharts.com[m,a]waclyyay[pc30!c20][vc60][iud20!ua12,26,9]
The Nasdaq McClellan Oscillator and Summation Indexes are linked below:
stockcharts.com
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.
Dr.Bob no longer hosts Stocktimers meetings on Sunday nights at AOL.
I can be reached at drbob512@msn.com. |
