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Showing posts from February, 2009

Weekly Stock Commentary: It Just Keeps Getting Worse.

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It had looked like last November lows were going to be the lows of the secular bear, but this will not be the case. Volume soared to register a distribution week and the losses have no clear end. The S&P has a measured move target around 555; it seems a long way away but you never know in this market. The Nasdaq hasn't yet breached November lows but it looks inevitable it will. Especially when you see breadth indicators like the Bullish Percents in neutral territory. However, although stochastics have room to fall I don't think the indicator itself will ever get back below 10%. Similar story with the Pecentage of Nasdaq Stocks above the 50-day MA; note neutral stochastics. Don't give up the day job. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Stock Market Commentary: Small Caps Under Threat

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Tech took it hardest but the recent lows weren't violated. Large caps escaped relatively unscathed but their long term picture remains poor. The index to watch is small caps. The November closing low of 385 is under threat and will likely see a test tomorrow. If the loses accelerate it will drag tech along with it. Small caps usually play the leadership role so weakness in this index will have far greater consequences than the current large cap meltdown. The malaise continues. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Stock Market Commentary: In the balance

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Volume picked up for a fourth day as markets decide which side of the fence they are going to play on. Large caps favour further weakness but Tech Indices are fence sitting; flat-lined moving averages are testament to the indecision. How they break will say much about the health of bulls I have modified the semiconductor chart to show a consolidation triangle in a pattern very similar to small caps. I like where the strength lies in the market - it just needs to show its hand more. Just look the at buying volume in the Semiconductor HOLDRs ( SMH ); sideways market with huge volume spikes (barely a squeak to the downside) is classic Big Money buying. Semiconductors usually show form during the early economic recovery phase. They are not there yet but this action is good. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Stock Market Commentary: Is there tech leadership?

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Bulls made a stand and helped erase the bulk of Monday's losses. Best news comes from breadth indicators where Bullish Percents and the Percentage of Stocks above the 50-day MA are strongly diverging (positively) to price. We may not be seeing much in the way of market breakouts, but there are stocks which appear to be building bases and will be the next leaders. We still haven't seen much action around the 200-day MAs so its still early days. In general, technology looks to be faring better than large caps. Although breadth indicators don't appear to have hit the same support levels as large caps have today - this is a bit of a mixed message; room to fall but performing better. The bullish divergence in the Percentage of Stocks above the 200-day MA has been breached but unlike S&P stocks there is at least a nascent uptrend; so things are improving for technology stocks over the long term. Certainly looks like toe dipping territory. Dr. Declan Fallon, Senior Market Tech...

Stock Market Commentary: Follow the leader down

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The past few days has the look and feel of a parabolic move down. It would appear the indices are following the lead of the Dow down. The point-n-figure chart has a target of 7,050 but a weekly chart sees little room for maneuver until 6,443 (then 5,503 and 4,061). The weekly chart clearly shows how the current decline is all about 'blue-chip' stocks - the Dow having emerged relatively unscathed from the 2000/02 decline. If there is a sliver of hope it's that Tech has weathered the meltdown relatively well. If only because 2002 lows are more or less where the Nasdaq was in 1996 and the index has yet to test these. Psychologically, a 1,000 Nasdaq is a big area to defend. As for the short term, keep an eye on Richard Lehman's Trend Channels ; these appear to be acclerating to the downside. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Weekly Stock Charts review from Stockcharts.com Publishers

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Late to the game here as we moved apartments. Likely be quiet for the next few days as we get setup for broadband (a chance for yet another multi-week delay). Yong Pan shows a mix of bullish, bearish and neutral signals; not one to inspire confidence and the market trend is clearly down. However, Yong is looking for a rebound. Volatility looks remarkably complacent for a bounce... Hollow red bars for a bounce? But no bottom yet. Breadth weak and weakening... Maurice Walker details his trades: After day trading on the short side on Friday, I closed my short and went long on several swing trades with the ultra proshares QLD, SSO, and DDM. My decision to go long was predicated on the 15-minute charts in conjunction witht 5-day stochastic on the S&P 500 daily chart. I also doubled down and bought future contracts on the S&P 500 E-mini (ES). Pleased be advised that we don't know yet if the Dow or the market has bottomed. I am still just day and swing trading. So I may exit the...

Summation Indices in a new longterm downtrend?

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The NYSE Summation Index may be conforming to a new bearish trending pattern. The prior consolidation triangle broke upside in late 2006 but failed to confirm a new upleg in the market. Instead, a gradual deterioration over the first part of 2007 led to the development of a new downtrending pattern which remains in place as of today. It is possible we could see this indicator drop to lows of -2,000 as part of the current decline, although historically it tends to zig-zag a little more; however, there is a reasonable chance we could see a new low below -1,577 for 2009. The 2008 low of -1,577 beat out the previous record low of -1,444 posted in 1998. A similar shift is underway in the Nasdaq Summation Index; the broad uptrend from 1998 reversed to a downtrend, the anchor for the peak was the 2003 high. What will be the anchor low for the next uptrend? Is it in place at -1,668? Whatever happens, there is a little to suggest the markets will be going up in earnest anytime soon. Dr. Decla...

Stock Market Commentary: Semiconductors end the day down over 5%

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The Dow may be making the news with its new 6-year low , but really the semiconductor index was the news. Only a couple of weeks ago it looked ready to lead tech higher. Now, its playing catchup - on the way down. It's hard not see all the indices make new lows as the Dow did. Bulls will cling to the possibility of a divergence, perhaps with Small Caps holding above November lows. This is not outside the realm of possibility with the index oversold and some 45 points away from November lows. But it's a big ask Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

New KIVA loans

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As I no longer provide a newsletter service (for now) the following re-loans have all come from past subscription supporters. Altogether another $225 is put to work. Altogether there are (have been) 97 loans made. Purchases of a Scratchback link in the right hand margin will have their contribution routed through KIVA. So if you would like to help while promoting your site buy a link today! Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Stock Market Commentary: Negative tone remains

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There was no sparks and fireworks, just a general acceptance of Tuesday's losses. The worry is from supporting technicals of indices. None are oversold enough to suggest a short term bottom is in place and many traders seem primed for further losses, or at least, unwilling to buy. The Nasdaq 100 shows the technical vulnerability best; note the dogged action of MAs as resistance. The way markets are positioned it looks like they are set for a big move down. The Dow is looking the most vulnerable, but at least it's technically oversold: Nasdaq Summation Index has only now given a 'sell' from prior overbought levels. Very ugly. Futures are suggesting a positive tone (5:20am ET) but it will need to be strong early to offset bearish pressure. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Dow Transports gone....

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A second look at the charts hasn't improved the prognosis. The Dow broke open/close support from November (but hasn't violated lows - yet) However, the Dow Transports cratered and it looks certain the Dow will do likewise. The break occurred on a third distribution day since the last accumulation day. Summation Indices turn down from overbought conditions - this could fall a long way; NYSE below Ugly day - Ugly outlook. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Stock Market Commentary: Hope dissipates

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Resistance from July-August kicked in for the Nasdaq preventing the breakout the market craved. The resulting gap sliced through 20-day and 50-day MAs, coming with a MACD trigger 'sell'. January lows have held but with large caps looking at November lows I wouldn't expect this to stay this way. Large caps really took it on the chin. The Dow is likely to slice through November lows as the chart deteriorates rapidly. The bastion for tech leadership - the semiconductors - lost out heavily. The resistance breakout is practically cooked and supporting technicals all turned negative. Going down (yet again...) Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Weekly Stock Charts review from Stockcharts.com Publishers: Happy Holiday

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One bad day and four so-so days left the market down but stuck in a bit of a rut. Is there any direction to be found? Yong Pan opens with a swathe of neutral signals, both from the S&P and breadth indicators. However Yong comments he doesn't see much room for upside. The charts were similarly lackluster. It looks like the 50-day MA is the area to watch for the SPY : Support buyers can look to the consolidation triangle; is there an opportunity here? Trade break (support or 50-day MA) with stop on the flip side; technicals mixed: Distribution days are thinning as accumulation days maintain steady form: Maurice has recovered and opens with three positive technicals: Dragonfly Doji for the Dow A Dragonfly Doji candlestick formed on the DJIA daily chart yesterday, which is a reversal one-day candle pattern. A Dragonfly Doji occurs when the open and the close are at the high end of the day. This Doji could signify a turning point for the DJIA. Notice that a progressive rising chan...

Weekly Stock Commentary: Breadth weak

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There wasn't much change on the weekly charts as indices unwound most, if not all of the previous week's gains. It looks like the indecisiveness will continue for another week as breadth indicators either stalled at resistance or remained in neutral territory. The Nasdaq 100 looks to be the only index making an effort and did enough to register a 'buy' signal: The weekly Nasdaq Summation Index (NASI) stalled bang on declining resistance But the NYSE Summation Index fell short of resistance, but is closer to overbought than oversold Weekly breadth favours bears as the market shifts sideways. Buyers beware. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

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