Stockcharts.com: Weekly review

August 25, 2006

I regularly scour through Stockchart.com's Public List to get a snapshot of what other market commentators are saying. This week's crop include some of the comments from the most popular chart lists.

First up is Ted Burge's support/resistance study. He had this to say on August 24th.

It is a matter of fact if you watch the charts. There are 11 new buy signals and 9 new sell signals with movement to O's dominating the activity. A 3 box reversal of price is normal price activity, it doesn't mean sell.

Stocks trading an average of 1,000,000 shares are in demand and over the last 5 trading days there have been 37 new buy signals and only 10 new sell signals for stocks meeting these criteria. Only 2 of the 10 sell signals trade on the Nasdaq.

Demand is the flavor and has been for a couple of weeks.

No matter what you think will happen, and no matter what happens, S/R tells where to expect it to happen.

Major indices are on buy signals (BUY SIGNALS) and PnF buy and sell signals don't happen every week and don't change very often.

Those of a bearish persuassion would find Mitchell Meana's QQQQ Elliot Wave count interesting. The (now) 7-day bull flag would have to break up and through $39, in order to confirm the earlier break of resistance in mid-August.

He also have a bearish opinion on the Dow. Although, a test of rising support (his green line) has yet to pan out.

His DIA analysis is more stark; the rising wedge, combined with a Slow Stochastic 'sell' trigger (including a soon-to-be 'sell' in the MACD), will make the Dow ETF interesting viewing next week.

Joe Reed is also calling a Dow top.

Michael Winfree is working off a more bullish perspective for the QQQQ. He is holding to the 'buy' trigger in the daily MACD, part of a channel bounce in the weekly chart. The Weekly chart of the QQQQ's sits an important test of the Bollinger mid-line - will this push through, or reverse, by next Friday's close?

I am most in agreement with what Robert New had to say on August 24th about the Tech markets:

Test back towards our 2120 Nasdaq gap and 50 EMA supports on the lows today followed by a late session bounce higher. The Dow also tested its recent 11,275 breakout and held by the close. Volume continues light overall in the market which is common during our current late summer period. We suspect the recent pullback is corrective and we get one more push higher near term before seasonality starts to kick in.

but he also cautioned:

We have some potentially terminal rising wedges forming on our Dow and SP 500 60 minute charts. If we get one more push higher in the patterns we are watching for negative divergences to kick in on that move. In general we continue to maintain a defensive posture as we head into the fall. Defensive groups continue to hold their bids best while many commodity groups continue to appear toppy on the longer term charts. Other groups are mostly mixed/choppy here with some rotation noted and as mentioned yesterday we have noticed quite a few false breakout moves and a number of breakdowns.

Matthew Frailey maintains some very clear, concise charts. He has an interesting weekly chart for the AMEX Biotech Index, which suggests a major upleg could be the pipeline. The Monthly chart trades at support, but the daily chart favors waiting for a break of the 200-day MA before turning bullish.