Monday, December 01, 2008

Weekly Stock Charts review

For the week that was - short as it was. What had the ers to say about it?

Yong Pan is looking for a higher low on the inevitable downward turn. More even split on bullish and bearish signals:

Technicals set for a downward move; VIX oversold, CPC also in bear zone.

But intermediate time frame looking good for a 'buy':

Yong Pan has quite a few other charts worth seeing; particularly his Bonds:S&P relationships with NYAD resistance.

Maurice Walker has eys on the next automaker grilling. Doesn't believe the worst of its has been priced into the market. But, has noted markets breaking resistance:

Based on improving technicals and market breadth, it is my personal belief that the market will rise off these oversold levels on the daily chart. Now clean out your ears, and hear me correctly! THAT DOESN'T MEAN WE ARE GOING TO CONTINUE HIGHER WITHOUT PULLING BACK FIRST. The DJIA has just had it's best 5-day winning streak in 75 years. We are overdue for a pullback at these overbought levels, but there is still room to mover a bit higher.

But I do think that we will head higher over the next few weeks so that the institutions can drive prices higher in order to sell into the rally. They need to lure new longs in for another killing. As prices move sideways, the correct strategy up until the breaking of the descending triangle was to buy support and sell resistance. That strategy should resurface as the most appropriate tactic, now that the big boys had a shake out move of weak long term investors with that penetration.

I know investors who don't use TA, who are planning on selling when prices rise back to the levels reached on election day. Well, low and behold my friends that is key resistance. I told this investor, that he fits right into our arm-chair chart pattern psycho-analysis. And guess what, he's not the only one who is going jump overboard at resistance, a whole host of folks will. And that is what will set up the right shoulder of the pattern in our speculative H & S bottom pattern on the daily charts, that is, should the descending triangles be negated. But prices must be ran back up, in order for more selling to ensue. The 4Q GDP will likely such the wind out of any advance. I plan on being in cash when 4Q GDP is announced.

But weekly patterns remain bearish:

Another problem is that the DJIA and SPX both put in bearish three identical crow patterns. But this week brought some encouraging news on those weekly charts. We got a bullish engulfing candle pattern on both of them. The last bullish engulfing pattern on the weekly charts 5 weeks ago never got confirmed, which led to more selling pressures taking prices down to the November lows made the previous week (the week of November 17-21). That is the week when the descending triangles on the daily charts broke down.

The Joe Reed summary:

Retail Index fighting for support:

Gold heading back to resistance:

While Oil works support at 2007 lows:

Ted lines are showing interesting support hits; but all those close knit resistance lines are above:

ATR Point-n-figure chart for the Nasdaq 100 pointing to 1,312:

Although the Nasdaq has yet to reverse from its bearish (but hit) target:

Finally, Richard Lehman is keeping an eys on short term rising channels:

11/28 -- Looks like window dressing to me. The indexes are stretching upward within their short term channels with no correction yet to the lower channel lines. That's bullish for the very short term, but also means the next sell of could be bigger when it comes. The most important development is the fact that a number of indexes touched upside channel resistance now on longer term charts: DJIA, RUT, XLF and more. Let's see what happens now that the window dressing is over.

11/26 -- A little holiday cheer to be sure. The indexes move upward in steep short term upchannels without any major pullback at all. VIX has peaked and backed off from 80 to 55. The small caps are particularly strong. RUT is now up 27% from its low just 3.5 days ago. The FXI China is up 30%!! We are starting to get close to channel resistance on the longer term channels now. A pullback could come at any time, but this seems to want to go ultimatey higher.

11/25 -- This rally is definitely showing signs of being more solid than the last few attempts. It has not exhibited wild gyrations and has not reversed after a day or two. It has broken downchannel lines on all indexes and can move up further. I have drawn in tentative green mini upchannels, but they are rather steep and may need to flatten out or feed into larger flatter channels. Keep your eye on the hourly and daily charts for potential resistance as those lines may be hit before the upper lines of the short term channels.

11/24 -- Today's follow-through just about cements my recommendation to buy in on Friday morning as my call of the year. If you didn't get in, don't worry -- you should soon have another chance, as this new upmove rolls over to create the lower channel line reference point. We have broken upward on every short term chart, which gives this more credibility than the prior one-day wonders. But make no mistake -- there WILL be selling into this strength and I expect it to begin as early as tomorrow.

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, market alerts and stock charts website