Monday, May 18, 2009

Weekly Stock Charts review from Stockcharts.com Publishers

Markets took their turn for the worse after weeks of waiting. How will it all end?

Tomas Leszczynski of Santoren Wealth Management made a great call with arc resistance:


Projected target for a pullback and the chance to create a reversal head-and-shoulder pattern at November reaction lows. Presumably broad bands provide less resistance than tight bands (as was the case in June 2008).


Measured move (with some wiggle room) played out on the Nasdaq?


Potential for a painful fall in the QQQQs:


Peter of CobrasMarketView is showing neutral short term signals but a swathe of bearish intermediate time frame signals.


SPYs primed for a measured move down?


Confirmed breadth weakness:


Bear market reversal soon to be confirmed on weekly?


'Sell' signal also in the ratio of consumer discretionary to staples:


Richard Crockett of StockTiger is showing a Gold Miner 'sell' on the Renko chart:


Dow monthly tag of 200-day EMA resistance:


Simple demarcation:


Anthony Caldaro of Elliot Wave Lives on is showing a wave 'iv' bottom on the SPX 60-min, so perhaps there will be a relief rally to sell into before we start looking at a major downswing?


Finally, Richard Lehman and his weekend channel commentary:

5/16 -- The short term downchannels are all well defined and in unison now. Most are at shallow angles and haven't really taken much away from the upmoves off the March bottom. Some indexes like XLF only broke at the mini level and aren't even in full short term downtrends yet at all. (The Bombay stock index is still up 50% since March!) The small caps are a bit weaker than the blue chips, but that's because the move was bigger on the upside and portfolio managers are now starting to rotate out of high-beta stocks and into more conservative ones. Companies, themselves are telling us that the market is fairly valued here as they are running to bring secondary offerings to market in order to raise capital. That additional supply is also holding the markets back at the moment.

Amazingly, the equity market appears once again to have predicted the turn in the economy six months in advance in classic form as economists now say the recession will end in August-September of this year. That doesn't mean everything gets immediately rosy again -- it just means GDP stops shrinking. The prediction is still for a slow growth recovery. That suggests to me that the 'V' bottom we've had thus far in stocks will turn into more of a 'hockey stick' look as the market tracks a slowly growing economy into 2010. For some indexes, that may be almost horizontal, while others take on a somewhat rising angle.

In that scenario, the one-year charts will eventually show slighly rising channels from the inflection point in March with the first leg up now possibly complete. The one-year chart of the QQQQ shows how the scenario may be unfolding. That could allow the equity markets to grind to a higher point this summer or fall, but it will likely be much more choppy and much less steep overall.

When the Dow does grind its way back up to 9000-10,000 (a likely target in the second half of this year sometime), the moment of truth will arrive for Elliott Wavers who see that as the beginning of the next major decline.

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

 
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