Saturday, October 13, 2007 Weekly review

A week of consolidation for the indices. Only the semiconductors suffered with a loss of 200-day MA support. How had the Stockcharters seen it?

Dr. Joe
gets this week off with his usual bullet point summary of the week:

He leads with the Nasdaq Summation Index - always a good one to look at. Rally looks intact for now:

Ted Burge has highlighted key resistance in the Qs (and in the Nasdaq / Nasdaq 100):

But at least the weaker Russell 2000 has found some support at 835:

Jack Chan looks to have redrawn support to ignore what looked like a trend-line break MACD 'sell' trigger.

The Gold Bugs index has a similar chart:

Maurice Walker has his usual great summary up:

10/12 Commentary: Come visit for video analysis. Money that speculated on a turn around last August paid off. Buying that selloff was a good gamble at that point, but the rally is now mature causing the indices to be overextend in their gains becoming much more speculative at these price levels. The crowd psychology may cause a change in risk assessment given an increase in volitility on the VIX. Investors may feel that an overextend market is no place to be making new commitments, which may cause investors to be more defensive and guarded, even taking money off the table.

Last weeks push to new highs followed by a one day reversal and selloff Thursday, may be a precursor of some type of corrective move or distribution. Given the proximity of our rising resistance on the daily trend channels, it suggests that we head lower on balance over the near term.

The On-Balance Volume (OBV) indicator distinguishes between up and down volume. When prices are moving higher so should the OBV. But when the OBV trendline is violated, while the price trend remains in tact, it hints of a reversal. When a divergence occurs between the OBV indicator and price action, it may be warning of a change in trend. We now have divergence between price and the OBV on DIA and the Dow (see first chart below).

That may be signaling that investors are less enthusiastic about this rally, and reluctant to put in new money into the market. Above the OBV is the Chaikin Money Flow which now has negative divergence in place from the high peak formed from our Fed rally. The money Flow and OBV indicate that investors may be cautious concerning the upside potential. I remain short this market.

His Diamond (DIA) chart shows his reasoning for the sell trigger:

while in contrast his Dow chart shows an upside target of 15,525 - long term upside?

He also has a Nasdaq projection of 3,062:

Is volatility ready to spike?

Robert New sees little in the way of resistance for the Nasdaq with a target similar to that of Maurice's:

And he sees further upside for Oil:

Richard Lehman had this to say on the week's action:

10/11 -- Wow! The Naz hit the upper line on its 3-year/daily chart -- the one I've been pointing to for several days -- and reversed with a vengeance. Just goes to prove how important (and dead-on accurate) channel boundaries can be. No news or other technicals accounted for this reversal.

QQQQ got hit the hardest at -1.5%, but breaks occurred all over the small caps and even on the SPX. I'd say this is an important reversal and indicates choppiness at best or possibly an interim peak. Don't forget that October is known for nasty downside surprises.

10/10 -- Other than the Dow, things held to their uptrends today pretty well. The Dow overstated things because of Boeing. Thus the minichannel break on the short term Dow chart is of questionable significance. Meanwhile, gold and oil broke to the upside from their sideways movements of late.

10/9 -- The large caps had their delayed reaction to the small cap bounce from Friday. The uptrends are all quite well intact. So, while lofty, nothing yet says the trends won't continue even further.

10/8 -- No change anywhere. Today's little dip actually brought some charts back down to lower channel lines on the mini channels. That may be all the markets need to resume their uptrend.

Below is his Nasdaq chart - maybe the aforementioned 3,050-3,100 will take some time???

As a closer, below are links to public lists run by bloggers (if I have missed any, just post them in the comments section):

Bill aka NO DooDahs

Chris Perruna
Chart Pattern Trader
Eco Stock Trader