Sunday, May 27, 2007

Stockcharts.com Weekly review

The week saw another attempt by the bears to kill what has been a resilient rally. What had the Stockcharters got to say about it?

Dr. Joe kicks the review off with his summary of the weeks action:



He has finally indicated the 'sell' trigger in his Dow (a little late Joe...):


Ted Burge has a good chart showing how Friday's action failed to reclaim resistance at 2,563 (based on his measurements - note the earlier attempted breakout in early May):


His semiconductor chart is caught between support and resistance - a move to 472 looks favored at this point (note increasing MACD weakness in histogram):


The Russell 2000 sits in a similar predicament:


Mitchell Meana has marked in his wave "V" top for the Diamonds (DIA). Its interesting this target also approximates the measured move derived from the Feb-March range:


With the Nasdaq 100 looks to have reached its upside target too:


Robert New has kept with the new highs in the Wilshire as an important indicator for market strength:


And remains bullish for oil:


His Russell 2000 shows the negative divergence between the technicals and the index very nicely:


Richard Lehman had this to say on the markets:

5/24 -pm- Touches to short term channel support lines for indices like the Dow and the QQQQ resulted in minor bounces which then came back and broke support at the end of the day. There is short term damage pretty much all around, though 40-day charts remain intact on the upside so far.

The dificulty here is that just prior to this decline, the indices blipped upward through existing upchannels in a perhaps final climax for this 10 month move. Having done so, they created question marks as to where the channel lines really are, and that raises questions as to exactly where breaks occur. Nonetheless, this one looks like a more serious break than recent ones...and we all know it has been long overdue. Do you want to stand in the door as thousands of portfolio managers try to lock in a nice profit for the year before going on vacation???

While Maurice Walker noted the rise in volatility prior to the market tumble:

5/23 Commentary: The Dow violated its minor trendline today, as a reversal took place after having marched into new territory. The Dow made a new high of 13,609 on an intra-day, but gave up gains on a reversal. Former Fed Chairman Allen Greenspan spooked the market today, commenting that China's booming stock market was unsustainable. Investor's took the news as a warning to the wise and took money of the table today, moving to cash.

Tomorrow the existing home sales & housing starts reports will be released. If the report is unfavorable, it could bring about concerns of an economic slowdown. The market looks to be starting to crack up. The VXN & VIX are showing signs of strength, which should add more volatility to the market.

The Dow halted just above its advancing accelerated trendline today. If that minor trendline breaksdown we should see a test back to the intermediate trendline at/near 13,200 to 13,300. If that fails to hold up we could backtest to 12,795.

The Nasdaq's 60 minute Pennant is backtesting the upper boundary of the Pennant. If the test proves unsuccessful the Pennant could fail giving way to selling pressures.
The Pennant measures to 2640. The Nasdaq did reach the target for our Cup w/ Handle pattern on the 60 minute chart today, having an intra-day high above 2600. Please vote.

The market looks toppy here, so lets get defensive and be ready to move on the UltraShorts.


Enjoy the long weekend.




 
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