Saturday, October 06, 2007

Stockcharts.com Weekly review

After a 1 week hiatus it is back to the Stockcharts.com review. There were solid gains in the market on Friday, so how did the Stockcharters see it?

Leaping to the top of the monthly hit list is Eric Muathe's list. He is optimistic for the Dow, with a target of 25,000 expected some time in 2,010.


George Zimmerman has an interesting Andrew's pitchfork for the Dow - the index is getting close to resistance:


His 20-year Dow's pitchfork prediction would make Eric Muathe happy (assuming the mid point is crossed):


Joe Reed made an a good point about the historic highs for the S&P at 1,553 and 1,555:


His S&P chart is worth viewing - especially his highlight on the huge leap in volume as the index made its first reversal at this resistance level:


The Gold ETF has made an important breakout:


And Oil looks ready to rocket:


although I am surprised to see airline stocks riding as high as they have in the face of new oil highs:


Jack Chan is showing a 'sell' trigger for the Oil Services Holders:


and Energy Select Sector:


with the Gold Bugs index also in trouble:


Maurice Walker highlights the possibility of a false rally (with some bad puns thrown in):
10/5 The September nonfarm payrolls rose above expectations to 110,000, that is 10,000 more that the expected 100,000. While the August revision figures increased from -4,000 to a positive 89,000. The market rallied on the expectation that a recession doesn't occur, based on strong employment.

Personally, I think today's move was a pseudo-rally retesting the upper boundaries of our trend channels in the daily timeframe. Possibly, the other side of the coin will manifest, as sellers take control due to the strong jobs reports. Traders may get pessimistic on the market, based on expectations that the Fed will adopt a policy of not cutting rates. Now that the S&P 500 has tagged resistance we may see the formation of our indice handles over the next two or three and a half weeks.

Recently there was an article in the local paper about a shoe thief in the valley where I live. This thief has been dubbed the 'shoe bandit,' by local residents. It seems that this individual has a fascination for shoes, and problem with kleptomania. As preposterous as this may sound, the Shoe Bandit has a Robin Hood complex, in that he likes to rob [shoes] from the rich and give [them] to the poor. Taking shoes that are left on a front porch in a particular neighborhood, and then putting them on a porch in poverty stricken neighborhood where there are no shoes present.

I don't want to get all TIED up talking about shoes, but on the HEELS of this possible pseudo-rally today, I did some SOLE searching. The shoe bandit made it appear that the shoes were moving on their own power and relocating, due to an illusion, confusing the issue. Institutions can sometimes perform similar illusions in order to lead us to believe the train is leaving the station, when in reality there has been an extended stop delaying the advance. Keep in mind, I could be wrong. I am still long-term bullish but short-term bearish, and am looking for Handles to form on an acb 60 minute corrective phase. So if the shoe fits wear it.

It is interesting to see the Energy Bullish percents on a 'sell' trigger:


Robert New is looking for 2,900 in the Nasdaq (a target dating back to July):


and his oil chart has marked in a cup-and-handle pattern - but has also illustrated a negative divergence between price and the RSI:


Is the 10-year note finding support at the channel? Resistance very close overhead - are bonds set to rally once more?


Finally, Richard Lehman has made some brief comments on the state of the market:
10/3 -- Things are still toppy and some small downward minis exist, but nothing to cause alarm at this point. Long term uptrends are still well intact. Tech weakness is evident in XLK and QQQQ but is contained within uptrends. The Naz actually made a perfect touch of ST support today. It seems as if the markets need some good news to fuel enough momentum to gain and hold new highs.

10/2 -- No material change to the trends today. A few charts still look toppy, but can rise in their channels and remain near upper lines. Gold and oil now look to be going sideways. So...nothing is breaking down and we are still likely to set new highs.

10/1 -- The Dow, Naz and SPX all were turned back by upper channel or minichannel lines today. Therefore, while the uptrend marches on all around, a few signs of toppiness are appearing.


With the dollar collapsing, yields set to fall further, and the market in a bullish quandry, the best opportunity is likely to lie in the gold sector. Certainly one to watch.



 
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