Sunday, December 03, 2006 Weekly review

After the Thanksgiving weekend and a week when the bears challenged the substantial bull rally, what had the Stockcharters have to say about the market.

Joe Reed has highlighted tops in the RSI and Ultimate Oscillator of the Dow:

he was emphasing support in Crude Oil:

and a top in the S&P Healthcare sector:

he had this to say about the Healthcare sector:

Micheal Mitchell has again kept his charts clear and concise. He has picked out the downside target for the Qs on the 15 minute chart

and has called a fifth wave top for the Qs (with a corrective A-B-C wave in progress):


and Russell 2000:

Ted Burge again kept the lesson simple:

Dec 2nd! Be not deceived, be aware of the facts. There are signs of a weakening trend and this is evident on the PnF report and the number of new buy and sell signals and particularly stock losing demand.

Support and resistance is based on fact. It is the precise level that price has changed direction dozens of times. It is objectively verifiable as long as the proper methodology is used to find it. It is not highs and lows and it takes time to find it. Better to spend time to know what needs to be known, than to spend money losing your time.

The bullish percent of 8 of 16 market indices moved lower today (friday)and the exception was materials. The EURO vs USD is a player and the Euro is meeting resistance and the USD is very close to support. This is relative to Energy, gold and materials.

When BP's are high, it is time to be defensive. When BP's are low, it is time to be aggressive. No hype and no predictions, just be aware of price activity and watch the pace of stocks moving to buy and sell signals and from X's to O's. A 3 box reversal on a traditional PnF chart is normal price activity. The problem because of the tight range of price activity in the last couple of weeks is that it does not take much to 'rock the boat' and we saw this a couple of times this week. It is all explained in my reports on my site.

The model 'Brain Dead' Portfolio on my site is there to examine. 10% return in one month. If nothing else it has shown that PnF traditional buy and sell signals work, and that the 'brain Dead' part is staying on the right side of supply and demand and letting price do all the work.

The 20MA portfolio is up 6% in the last week and it was a 'weak' week.

Support and resistance makes all the decisions for you and instead of watching indicators jumping around all over the place, the only thing we must watch is price. (you know, the thing we trade).

Note his support/resistance of the Energy Select Spdr (XLE):

with the point-n-figure chart target of $81.07

Jack Chan is in agreement with a breakout in the Energy Sector (XLE), but also the Oil Services holders (OIH):

To close I will finish with Richard Lehman's excellent channel lines. The charts are self-explanatory: