Monday, March 19, 2007

Fallondpicks.com weekly review

A St. Patrick's Day Boccoe tournament meant there is no Stockcharts.com review for this week. Other than Friday's higher volume there wasn't much to add to the week. A retest of last week's lows looks most likely for this week.

Swing traders have perhaps the most benefit given the relatively tight trading - trade break of highs/lows and place a stop at the opposite end of Friday's range. Given stochastics just stepped above oversold levels the significance of the bearish cover / bearish engulfing candlesticks created by Friday's close in the markets is reduced. The higher volume is a bigger concern for the likes of the NASDAQ, Dow, NASDAQ 100, and S&P as it ranked as a technical distribution day.

Relative strength switched back (again!) to a more bearish alignment - the fourth such change in a row {Tech indices > Large caps > Small caps}. Tech market internals [$NASI, $NAA50 and $BPCOMPQ] were consistent and continued to decline. The $NASI has some 750 points to run to oversold levels (based on Friday's 17 point loss, this could take some time - or 44 trading days if the rate of decline was to remain the same); the $NAA50 probably has another 600 points before reaching a bottom (but could find demand on another 300 point loss); the $BPCOMPQ has 23 points or so before it reaches oversold levels typical of bull markets (9 points in 3 weeks predicts a bottom in much the same time as the $NASI - or some 45 days away).

In summary, the last couple of weeks have acted like racers jostling at the start line. Will Monday see the starter gun fired? Bears have the momentum in their favor.

On a side note, it was a busy sporting weekend for the Irish:

[1] Just misses out on the Grand Slam of Rugby

but

[2] Beat the former world champions, Pakistan, in the cricket world cup:





 
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