Monday, January 18, 2010

Weekly Review of Publishers' Charts

A weak Friday wasn't enough to break the trading range. What has this week in store for traders?

Anthony Caldaro of opens up with a 60-min S&P chart which has a 4 wave move mapped, suggesting a new high is in the making.

A weekly chart gives the case for a probable five wave rally in the Nasdaq - in wave 3 currently.

Yong Pan of Cobrasmarketview shows a mix of signals over the intermediate time frame and a distinctly neutral short term picture

Bearish divergence in the NYMO

Other hot-and-heavy indicators: $CPC and $CPCE

A mechanical trading strategy for the SPY

Joe Reed starts with the summary of last week

New 'sell' signal due for the NASI? Note Full Stochastics

Again, note stochastics in the dollar - not quite the bottom?

Richard Lehman of notes the momentum shift to bears.

1/17 -- Friday's decline does not appear to offer the bears a fall-off-the-cliff scenario, but it does change momentum considerably. In fact, momentum has already been changing since early January. If Thursday was an intermediate peak in the Dow and SPX (which is supported by the stochastics momentum indicator), then they are the last ones to have peaked, since the small caps peaked on the 7th and the techs peaked on the 5th.

We have breaks or slope changes in short term minis that have been active channels from as far back as mid December. A few green channels are broken, but the broader index greens are mostly still intact. Many of the breaks still fit a flat sideways configuration, rather than a sharp downward slide. And VIX peaked at 19, but then collapsed in the last hour, suggesting that the fear gauge is not ringing any alarms yet.

The rise in the dollar may be a partial culprit for Friday's action, which was likely exacerbated by option expiration. Complacency still abounds, and earnings reports are still expected to be positive, so nothing yet suggests a hard sell-off. However, the short term damage dose suggest that further slippage is likely and testing of green upchannels in both the short and long term charts is likely -- even while already-built in earnings numbers are reported.

1/15 -- Thus far, aside from a few breaks at mini level, the only things that have broken at short term level (green channels) are the high-beta sectors: golds, oils, techs, and communications. Meanwhile, there is no long term damage anywhere and the large caps are trucking right along. Momentum indicators have only turned down on small caps thus far -- and momentum is not price. It can turn back up or wiggle sideways while price continues to rise. The bear cub that was spotted earlier is back in its den again.

Following on from the stochastics in the dollar, Richard shows a good support line where the eventual bottom may fall:

Finally, Robert New of tracks the long term trend in the Nasdaq; still some way from a challenge.

As usual - plenty of warning signs for a top, but no break of trends.

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