Quite a reversal today with the Nasdaq 100 down 1.5% and the Russell 2000 (RUT – small caps) down almost 2%. Looking at the daily chart the RUT sliced through the 50/10 LRC and actually took out the volatility stop. The S&P, Dow, and Nasdaq stopped right above their Volatility stops but in my experience, the small caps lead the way and therefore the RUT may be telling us something. The Nasdaq needs to take out 2700 and the S&P needs to drop below 1495 before we really have something here. But back to the RUT, the last pullback was to 894.34 so that will be the first important benchmark to see broken. Many more after that including up trendlines 810ish, bolinger bands 890, and big support at 868.50. The Ergodic has crossed down and is giving a bearish divergence. The ADX turned, a magenta ball per Gail Mercer.
The weekly is also validating this possible warning sign. We have a upper bollinger band failure to penetrate, usually means exhaustion. We have a way overbought ADX at 65. And we have the ERgodic beginning to roll over. The week is not over and these are all just the beginnings so we need to see a lot more confirmation but I still think this is a warning of some significant down moves in the market ahead.
The Nasdaq 100 has been going sideways now for over a month, while the other markets Dow, SP, and Russell have been trending upward (at least till the end of Jan). Look at this hourly chart of the NDX. Simply buying around 2725 and selling around 2745 you would have made 20 handles 7 times beginning 1/9/13, not to mention the other side of shorting at 2745ish and covering at 2725ish. Dropping down to a 12min or 5min chart would have worked well in timing the entries.
Apple has had a tremendous, parabolic rise followed by a huge drop from 705 to 435, over 38% drop in price, in market value. Wow! But after such a meteoric rise what would one expect. (Interesting that 38% is a Fibonacci number.) Here is the daily chart first. Strong downtrend but not oversold per ADX. Strong, increasing spread downward on both 50/10 and 25/5 LRCs. Slightly waning momentum per the ERGO and a bullish divergence. And it stopped at strong support. Possible bounce in the making? Longer term see the next chart.
Weekly basis its in a strong downtrend on all indicators, but not oversold. However Continue reading “Apple’s bear move”
Dow: On a long-term basis looking at the monthly charts .. all is bullish, with a couple of caveats. Its nearing the previous high of 14,198 but has yet to take it out. The ADX is not showing a strong trend, as compared to say 06,07,08 since it’s under 30. It hasn’t tagged the upper Bollinger bands since early 2011, a failure to do so is a strong indicator of waning momentum. So we need to see what happens in February.
The weekly charts dow chart, however, has all indicators pointing up. Pushing the upper BB channel, strong Ergonomic, trending ADX but not overbought. Continue reading “Market Indexes at 2/1/13”
The S&P appears to be on its way toward 1576, the high in 2007. Looking at the daily and weekly charts, everything is pointed up and now that it took out resistance at the Sept. 2012 highs, and the debt ceiling issue has been put off for 3 months, or appears to be… I don’t see much to stop it. The ADX is not in overbought territory so there most likely wont be a pull back for a while yet.
And on a weekly basis all indicators are pointing up, what appears to be the beginning of an uptrend. I would not want to be short the mkt here. Definitely not overbought territory.
The market sold off a bit today, once again “fiscal cliff” worries. Continue reading “Post Xmas Selloff”