Monday, January 31, 2011

Weekly Review of Stockcharters: Bears or Bulls?

It has been a few weeks since this was last done. What has changed amongst the Stockcharters?

Topping the visit list is Santoren.com with Tomas Leszczynski. Interesting look at the S&P if it was an oscillator...


I don't normally post individual stocks here, but this is nicely done from Tomas:


How will early year buying hold up as last Friday's selling unwound the prior five days of buying?


Anthony Caldaro of Objectiveelliottwave.com has marked a Major first wave top with the second wave kicking off from Friday's high. The good news for bulls is that a third wave higher should emerge in a few months.


Richard Lehman of the Channelist.com has indicated channel breaks in the Dow 5-min and 60-min charts with a clear resistance confirmation touch on the daily. Lots of room down.


1/23 -- OK, I've updated everything now. Sorry, but deadlines on book #3 ('Options for Volatile Markets' - coming in Sep) have had me hunkered down for weeks.

This correction is a bit more real than the false ones of late. Short term upchannels have broken and are likely to play out further to the downside. The Dow may be flashing a false sense of security while everything else weakens. Small caps are definitely correcting. Most other country indexes have been correcting, some since November. Transports are now correcting (not shown here), and gold is correcting. Volatility has picked up significantly as well.

I believe this has more to go as the short term downchannels play out. But bounces will occur as the 'buy-the-dip' mentality is still very strong. Small caps could bounce soon, in fact. (Larry McMillan says the seasonal weakness in small caps runs through the 27th.)

The Dow and SPX will eventually participate, but don't expect them to necessarily catch up in magnitude. Large caps with good earnings momentum will not likely sell off too much.

Yong Pan
of Cobrasmarketview shows a more bearish outlook on Intermediate-term breadth signals - although I'm not sure if Friday's sell-off was part of the analysis as short-term signals are neutral.


His automated system is positionless, but won't be long before it switches to a short.


Are Treasury Yields about to push higher?


Bears will like the Dow chart by Anthony D Allyn of Elliotwavehound.com. It's a long term projection which seems fanciful, but it does show a considerable room for a correction.


Finally, Micheal Eckert of EWTrendsancharts has labelled a fifth wave top to complete a ABC correction. Friday's finish was bang on support of the fifth wave move.


So with the majority looking at a correction is it time to be a (bullish) contrarian? I don't think so, but this rally has totally passed me by... (so this is the view of a begrudger!)

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Zignals Trading Strategy Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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