Monday, October 06, 2008

Weekly Review of Stock Charts

After a 'quiet' 2 weeks of market action it's time to catch up to what the Stockchart.com posters have to say on the market. One must note this is weekend commentary and precludes comments from the morning slump in the futures market.

Yong Pan tops the list; his breadth indicator watch is solid bullish, but the S&P shows more bearish than bullish/neutral signals.


An argument is made for the September bottom - but the market keeps on defying the bottom calls:


The VIX:VXN relationship is in strong bullish territory, but other breadth indicators are back in negative territory:


Interesting 3-day sell climax. How will that pan out for Monday?


NYSE Percentage of Stocks above 200-day MA at extreme lows:


Maurice was speechless (literally - no weekend commentary)! His QQQQ chart looks to need further technical improvement before a bottom is in:


Interesting up channel in the VIX 60-min chart:


A bottom for oil?


But long term trend for oil gone:


Joe Reed summarises the week in a nutshell:


Joe has a slighlty different perspective on weekly oil support:


Dollar rally in trouble?


Good for gold???


Oil services take a thumping:


Ted Burge's small print gives the next Ted line for the Qs down at $34.08 - quite a void from $37.26.


Finally, Richard Lehman sees weak price action trumping 'good news'

10/4 -- Probably not too much of a surprise that the American public isn't buying into the rescue plan any more. What all the arguing this week told us is that few people really grasp what's going on (including Congressman, 80% of which studied no economics or finance in college), and that just about everyone is stunned at the magnitude of this problem and disgusted with the proposed solutions. Ironically, to pass the bill, they had to add another 100 billion to the already unfathomable cost. Rescues aside...Goldman Sachs came out Friday saying the recession will be much worse than expected and will last through 2009.

The charts seem to concur. Short terms are all still heading down -- including gold and oil. What looked like upward breaks on Friday in the Dow and SPX gave way and gave us nothing more in the end than a slope change in a continuing downtrend. Long term charts are what have me worried. The small caps all came down to their long term (one-year) lines now. The Naz hadn't touched that line since last March. That could be viewed as an opportunity, BUT in the process, the large caps are going below those long term supports now. It appears that the long term charts -- as bad as they are already -- may be accelerating downward. We need to bounce this week to remain in the current long term trend channels, which are already steep enough, thank you.

VIX remains very high. Buying puts therefore gives little protection as they are so overvalued. The only thing that has saved me on my longs is writing calls as they are similarly overvalued. At some point here, we will likely get a snap back rally, but unless it breaks the short term downtrends, I'd use it to sell, short, or write calls.




Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website
 
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