Saturday, September 08, 2007

Stockcharts.com Weekly review

After a one-week hiatus it is back to the weekly review. A nasty end of the week leaves some questions on the state of the rally, notably the strength of the 50-day MA as resistance. What had the Stockcharters to say about it?


Dr Joe Reed
kicks the week off with his weekly review:


His S&P chart is interesting because it shows the reaction low in stochastics, along with the presence of support:


And hasn't changed his opinion for a bottom in the Dow (weekly chart):


Ted Burge makes note of what should be watched on the "Ted Charts" (support + 20-day MA + MACD histogram):


Maurice Walker had this to say about the market (before Friday's plunge). His charts are available by following the link to his page:

9/6 Commentary: Crude Oil continues to move higher as prices flirted with the previous high of 78.77. Today's intraday high was 77.43, just a fraction below. Crude has not been in this range since the summer of 2006. Crude Oil broke out of an inverse Head & Shoulders pattern last june, that measured 16 points with an objective target of approximately 84 or 85 dollars. I continue to be bullish on Crude, but it's ETF, ticker symbol USO, might get a reaction or consolidation phase before we move higher. Crude Oil continues to be in a trend channel and the upper boundary line is pointing toward the 84 dollar area (see 1st chart below).

Rising Oil prices may wane heavy on the market. We are stuck in a rising minor trend that has a higher high and higher low, but we have continued to fail to get a significant close above resistance on all the indices.

The indice 60 minute charts (last 3 charts below) continue to have Rising Wedges. We may rise to test the upper boundary on the Rising Wedges before they breakdown. If we move above the upper boundary of the Wedge, the pattern will be in jeopardy and a minor channel may form on the 60 minute charts. Continue to watch the previous minor lows in the 60 minute timeframe. If the we fail to continue to make higher lows, a reversal of the current contra-trend rally may occur, taking out our previous minor low.

The stock market continues to be meandering aimlessly in a trading range with no clear fixed direction. Bulls must be cautious here, due to the obvious falling price channels that have emerged. But if buyers come back in full force, and volume trends change, I would be willing to revise my current outlook. But I continue to see no evidence yet that our current downtrend is over. But any wise skeptic will become a believer once presented with the proof. Just ask Perry Mason. Thank you for taking the time to vote. It is deeply appreciated.

Here is his oil chart:


and ETFs:


Rodney Gorchinsky has an interesting "worse case" scenario for the Dow:


with major support been tested on the weekly chart:


Robert New's Treasury Yield chart suggests rate cuts are on the horizon:


I shall finish with Richard Lehman's comments - I like the idea of the A-B-C correction which fits with some of my weekly charts made available to newsletter Subscribers:

9/8 -- Here's my summary on where we are right now...The decline this week was contained within the short term upchannels, which are still in place off the August bottom. In fact, both the Dow and SPX had picture perfect touches to their uptrend lines on Friday's close (channel magic at work!). QQQQ, XLK and XTC are exceptions as they broke through their upchannel lines on the downside, but techs had risen more steeply off that bottom so I'm not terribly worried about that. If the Dow and SPX do not bounce off this touch on Monday, I would be more concerned. Minichannels this past week are all fairly well defined and do not suggest a big sell-off here.

The longer picture remains a question mark, however. The rally off the August low looks to me like a countertrend rally. If that is the case, then we could expect to see another peak this month and a sharp series of declines again. That would fit historical seasonality and the Elliott Wave folks have been calling the decline as an 'A' wave down to the August low and a 'B' wave back up now. That suggests another 'C' wave down is yet to occur. I'm playing the long side while the ST upchannels remain intact, but remaining alert to another peak this month.

9/6 -- Everything is still tracking within existing uptrends. The little break of minichannels a couple of days ago has led more to sideways action than anything more serious and that is bullish. In some cases, the charts may already be heading upward again in revised minichannels. Oil and gold remain very strong.

9/5 -- The latest upward minichannels in the short term charts ended today. That says we are in a downward mini that could possibly take us to the lower ST channel lines. For the Dow, that is around 13040 right now. Longer charts were pretty much unfazed.





 
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