Monday, November 16, 2009

Weekly Review of Publishers' Charts

What will last week's little rally bring to the markets at large? Anthony Caldaro of has illustrated a fifth wave move from the November low (hourly). If the fifth wave was to map the length of the first wave then it could take the S&P to 1,115.

However, when you look at a monthly chart the strength of the rally looks questionable; and a 'B' wave of an 'ABC' is not good news for the coming years. However, once the 'ABC' completes the markets will be well positioned for the birth of the next major secular bull market (but I am looking towards 2015 as a guesstimate for the final low in the current secular bear market).

Richard Lehman of has short term upward channels fast approaching longer, intermediate (and upward) channels.

11/15 -- Most indexes exited their blue minichannels from the first of November, but sideways, suggesting a wider channel was at work and that short term upward momentum is not yet complete. I've now drawn in that wider channel on all but the SPX, which for some reason doesn't fit as well. So I now see the indexes having fallen back to a lower uptrend line, but still heading up. There is no room to widen any further, though, so any drop from here would make for a break. And if they do bounce upward Monday, it should cap this move early in the week, because it will run into longer term chart resistance.

11/12 -- While a few indexes like tech stocks and financials haven't broken yet, the broader indexes have. There is now sufficient evidence in my view to conclude that a short term break is in progress. Thus far, there is too little data to get a fix on any meaningful downchannel lines, but perhaps by tomorrow, we should be able to draw some. Meanwhile, the break is rather mild and could bounce at any time.

11/11 -- This morning's peaks fell back as many indexes hit upper lines in both the short and long term charts. Whether those peaks form an interim top is unknown, though we should get an answer soon as the blue minis are steep and narrow, rendering them quick to break on any downward or sideways move.

Yong Pan of CobrasMarketView offers quiet a mixed picture of market health; neutral short-term signals and bull/bear/neutral intermediate-term trading signals.

Short term trading signals overbought

But a back-test of broken support in play:

Combined with a (bearish) complex head-and-shoulder pattern:

Matthew Frailey of still leads with negative divergence

Aroon making for interesting viewing:

and Matthew is another to focus on small cap underperformance

Volatility and TRIX playing the bearish side more; is there a broadening at work for the VIX? If so, rally could extend with VIX down in the mid-teens????

Finally, Michael Eckert of EWT Trends and Charts has a chart of the Russell 2000 showing fan structure supply and demand. Yellow zone is the battleground and it's currently closer to an upside break than a drop. But can it break 597 resistance?

Futures predict a positive open for the market so upside is likely to continue until we run into resistance from the 7-week uptrend as per Richard Lehman's comment. There bears will probably try to kick the market down (again - perhaps unsuccessfully so).

Dr. Declan Fallon, Senior Market Technician, November 2009 has seen a significant upgrade and is on course to becoming the eBay of finance with our new Beta MarketPlace and a new rich internet application for finance, the Zignals Dashboard. Zignals now has new fundamental stock alerts, stock charts for Indian, Australian, Frankfurt and soon Canadian stocks, tabbed stock list watchlists, multi-currency portfolio manager, active fundamental system stock screener and trading system builder. New Forex and Index data.