Monday, November 17, 2008

Weekly Stock Charts review

Another hectic week in a month full of hectic swings. What did the Stockchart.com ers have to say about it?

Yong Pan has the first of two sell signals emerging in the S&P.


Is BB width still a little frothy for a bottom (= too much volatilty)?


Pan outlines the difficulty markets will have to overcome to classify a follow through day; it looks to be a big ask for Monday (Futures down in pre-market).


Breadth 'sell' signals in Bullish Percents and McClellan Oscillator:


Maurice Walker has a long commentary which can be read by following his link. He highlights the Percentage of Stocks Above the 50-day MA as a key indicator for a bottom:


Maurice views Friday as a bearish inside day where I would view it as part of a bullish harami. Either way - the two-day highs have to be breached to negate one and confirm the other:


His comments on the MACD are important:

The MACD should be watched closely. The MACD histogram got a bearish triple M pattern (m-M-m) on the indice daily charts. That could cause the MACD to penetrate through it's signal line causing further stress on prices, allowing the bearish descending triangle patterns to run their course. Proceed with caution, this market isn't for the faint of heart. Don't play it unless you can afford to loose the capital you are placing at risk. If the MACD gets a bearish crossover, expect the bears to run roughshod over the bulls.

His charts on the indices ETFs tell a good story:


The Aroon 'buy' trigger is disappointing -

Right now the Aroon on the DJIA is classified by us technicians as in a parallel movement. A parallel movement occurs when price consolidation is taking place. A parallel movement is annotated on the Aroon indicator when the Aroon up and the Aroon down move in concert together roughly running parallel near the same level. That is what is going on with DJIA and we need to the Aroon up move above 70, if the bulls are going to get any traction here at this level of support.


Joe Reed posts his summary; plenty of "optisism"....not


I wonder what this means for support in the retail index. I hadn't realised it was back at 2003 lows:


Ted Burge shows a point-n-figure buy for the ProShares UltraShort QQQ (QID). Target of $92.50:


Richard Lehman is similarly lacking in optimism:

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Now for more sobering news...we've had some precision channel magic now as the indexes bounced off lower short term support lines, blew through upper resistance lines, and came back and retested those breaks. We can thank the short coverers for that. But, importantly, I now see some things that indicate those breaks MAY NOT BE A NEW MINI UPTREND AFTERALL, but may be a slope change that is still heading lower.

I pointed out yesterday that the larger channels (in black) on the hourly charts still had more upside room. I now believe we may NOT go back up to those upper channel lines just yet. Several reasons. First, on the broad index charts, there is no clear mini upchannel anywhere. Second, if you look at the XLF and XLK hourly charts, I drew in a red channel indicating a slope change rather than a new uptrend. That's what may be happening in the broader indexes, but that is not as visible yet. Lastly, the fundamentals are simply awful and are likely to get worse. GM will take center stage now and regardless of whether they are saved or go under, it will be a really lousy scenario with huge negative consequences for the corporate sector. Their unfunded pension liability alone will wipe out the entire Pension Benefit Guaranty Insurance fund.

Anyone want to play contrarian? Not a happy bunch this week...



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