Monday, February 09, 2009

Weekly Stock Charts review from Publishers

A solid past two days has given the bulls some leverage; what can they do with it?

Yong Pan has seen short term strenght turn neutral, but the intermediate term picture has turned more bullish. Yong notes low CPC figures are concern although I would give them a more mixed view (look at end of November). Will this be an overreaching rally and summer collapse as I might think happen, or something else?

Complex head-and-shoulder pattern still playing out; but resistance (in addition to the 50-day MA) still a concern. Other than stochastics the technical picture is not too bad if your are bull, even then, stochastics can remain overbought for a while:

The consolidation triangle is one to watch; 900 looks like it will be a battleline

Distribution days are drying up; sideways market best bet forward?

Maurice - get well soon!

But some good charts on his swing trading. The negative divergences suggest Monday will be a down day:

This volume in the homebuilders (XHB) would have slipped me by...

QQQQs breakout:

Richard Lehman considers things near the end, rather than a beginning.

2/7 -- The mini rally continues over the notion that yet another stimulus is about to be announced. The rally is in a narrow, well formed minichannel (blue) that is part of a larger minichannel (green)that can be seen on the hourly charts. Many indexes are at the top of that green up channel now. We are therefore more likely near the end of a move than the beginning. It is taking the indexes to the larger declining channel line (purple) from 2008 that should provide material resistance as well. (The purples can be seen on the hourly as well as on the daily/one-year charts.)

The QQQQ is already pushing through its purple, but is the only index to do so, and remains in its green. It is not uncommon to 'push' through a larger channel line with a strong mini channel, and have it NOT be a break. The other indexes are still somewhat below their purple lines.

VIX hardly moved for a 200 point rise, but the VIX futures are still saying the markets will work higher by March and April. That's a strong bullish indication for sometime in the weeks ahead. So...we may work higher, and the green channels govern the day. But since things are already at the upper greens, immediate gains will be limited and subject to a 'sell on the news' reversal at any time. Remember, this is an entirely hope-driven rally. Nothing the government does will change anything immediately. There is not a single fundamental improvement in sight yet. So, if you buy on this euphoria, you have to be ready to sell the moment it evaporates.

David Bailey's CPC chart is good (if a little large!)

Finally, Dr. Joe and his week in review:

Anticipate weakness for Monday but this weakness might be the chance to buy the strength from last week.

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