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Showing posts from May, 2009

Weekly Market Commentary: Long Weekend

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It's a long weekend in Dublin but it was short week for the markets. When the daily noise was taken away we have a market working on weekly resistance levels. The Nasdaq closed above 1,759 resistance but hasn't truly cleared it. The negative divergence in the MACD histogram will be harder to shake. The Nasdaq 100 is caught between levels with support at 1,298 and 1,453. However, by cleanly breaking 2004 lows it gives reason to expect the Nasdaq to push higher. Market internals are guiding down but the markets themselves are contradicting breadth much like they did from late 2006 into the latter part of 2007. Unfortunately, the 2007/07 negative divergence eventually came home to roost but will it be two times (un)lucky for the averages? Probably not - but it's reason to be wary not just for the daily outlook, but for the long term weekly view too. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfoli

Inflation off to the Races?

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From Stagflation in 2007 to the mid-point of 2008, a brief period of deflation, now it looks like inflation has returned. Falling Bond Prices on Rising Oil Prices are on course for what could be a big run. As a sidenote, the dollar index looks ready to retest 2008 lows which is bullish for gold (and inflation model). Gold prices look to have formed a cup-and-handle pattern. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

Stock Market Commentary: Holding Station

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Tech continued to lead the way with indices holding on to their gains with heavier volume. Technicals remain mixed although the MACD trigger line is on the verge of a bullish cross above the bullish zero line. Large caps did enough to maintain form but lacked convincing volume. The 200-day MA overhead will keep long term interest away so look for large caps to break first. The Russell 2000/small caps has the same issue as large caps with the 200-day MA lurking overhead to add supply It's hard to see tech been able to drag everything higher (i.e. above their 200-day MAs) but they are doing what they can. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

Market Sentiment: Trend in Percentage of Stocks above 50-day MA firmly bearish

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The indices are trading within narrow ranges but sentiment has certainly shifted bearish. The Percentage of Nasdaq stocks above the 50-day MA has continued to trade down from its May high - helped by the Summation Index. The same is true for the S&P: Reasons not to be a buyer. But is it a reason to sell? Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

Stock Market Commentary: Weak Close

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Another shooting star (there you go again Dave!), another distribution day for the Nasdaq and Nasdaq 100. Consolation came from each holding their respective 200-day MAs. Their general good health was down to the semiconductors. They spent the day swimming against the tide of broader market selling. Although it tired at 270 resistance. There was no such solace for large caps, although volume selling was not as heavy as it was for tech. The S&P clings to rising support from April lows. Given the sharp drop in bullish sentiment and the number of distribution days in May it is looking more and more like an intermediate term top is in place and markets will remain weak for the summer and likely into the seasonally weak September, October period. However, this does not necessarily mean a sharp fall is imminent; a messy but shallow decline would match a listless summer trading period. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlis

Stock Market Commentary: Rally and Bluster

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A sharp rise in consumer confidence set the stage for a mammoth rally. All that was missing was some matching volume although volume did climb to register an accumulation day. The Nasdaq gained some momentum off the S&P with a relative strength shift in its favour. Not to mention a close above the 200-day MA. The Russell 2000 was able to make its own momentum gain over Tech, leaving indices in their most bullish alignment: Small caps > Tech > Large Caps . The S&P - although the weakest of the indices today as money rotated into more speculative indices - was able to dig heels in at the 20-day MA. But even with all of the gains, supporting technicals for each of the indices are weak and didn't improve on the back of Tuesday's gains. But, buyers are in control and unless there is a collapse tomorrow they remain in control. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and st

Weekly Stock Charts review from Stockcharts.com Publishers

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With summer here it's the start of quiet time for the markets. What had the last week brought for the markets. Yong Pan of Cobrasmarketview regained control of the top of the Stockcharts.com table by five hits. There was no major change on the sentiment front with neutral short term signals and bearish intermediate term signals. Peter is watching for a break of $88 on the SPY to create a new lower low. 'Sell' signals have crept into the weekly charts: On the 60-min chart the battle lines are drawn Tomas Leszczynski of Santoren.com has a target of 820 for the S&P or a 10% trim from where it lies now. You can see how this plays out on the arc but it looks like it could be a sharp move down, perhaps with follow through to 760? Keep an eye on the monthly DOW chart of Richard Crockett's ( Stocktiger.com ). With just a few days left in May the shooting star is looking to be part of a larger advancing block. Richard Lehman has become more skeptical of the short term

Weekly Market Commentary: Long Weekend

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It was no surprise to see the week end on a quiet note. All this contributed on the weekly charts was a lengthy period of indecision confirming long standing resistance; most notably 1,759 in the Nasdaq and 517 for the Russell 2000. The Russell 2000 is nicely set for a second reversal head-and-shoulder pattern assuming the index drops back to 370 or thereabouts. It is looking clearer on the weekly charts that there is a 'sell' for both the Nasdaq and S&P. Take at least some of the profits you may have and trail a stop on the rest, but now is not looking to be a great buying opportunity. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

Stock Market Commentary: Don't Expect Much For Friday

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The swathe of bearish candlesticks on Wednesday gave way to the inevitable selling. However, now that it is done (to an extent) it is unlikely Friday is going to see much follow through downside. The Nasdaq finished on a new softer trendline and will likely remain there by the time the market closes. The 200-day MA will probably contain any attempt at a rally. The Dow is similary inclined although supporting technicals point to greater weakness in the days ahead. The recent rally in breadth failed to find support from technicals; this rally is nothing buy a relief rally in a broader intermediate downtrend. The Percentage of Nasdaq Stocks Above the 50-day MA shows this best. With able assistance from the less volatile Summation Index: Best to sit this out and see where the next reaction low lies; 1,773 is already the line in the sand as a reaction high for the Nasdaq (ditto the May highs for the other indices). Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock ale

Stock Market Commentary: Backtest Complete?

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The reaction move back to the highs may have completed following the late day selling and the higher volume. The Nasdaq high of 1,767 with its bearish inverse hammer was only 6 points away from the early May high of 1,773. The Dow flashed a similar bearish inverse hammer but did so with marked weakness in on-balance-volume; this was more bearish. The inverse hammer in the SOX made a picture perfect touch of resistance from former trendline support. The S&P was one of the first to mark a 'sell' trigger in on-balance-volume and it looks like this weakness is going to take the index down to its 20-day MA at the very least. Tomorrow could be a bad one.... Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

Stock Market Commentary: Semiconductors Have The Best Of It

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In what was a mixed day for the averages; slightly up for the Tech averages, slightly down for Large Cap indices. The only index to emerge with any credit was the semiconductors. In what was a stall-out at the 20-day MA yesterday gave way to a respectable breakthough today. Even with respect to relative strength, the semiconductor index started to outperform the Nasdaq 100 once more. The question is what form will this rally take? The ascent from March has broken but a new trending opportunity exists using the May low as part of a new trend from the March low. The 50-day MA becomes the best place for a trailing stop. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

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