December 19, 2007 - Market Recap

Todays focus is only going to be on the Nasdaq composite index. The 8 day moving average is below the 21 day moving average which is below the 55 day moving average. This shows that a general downtrend is occurring. Until that switches the long term, medium and short term trends are all down. The daily price is also below all of the moving averages.

The volume also did not increase much today. There is no steam for the bulls to raise prices upward. There was also very little price change. The stochastics are also included for completeness. Even though we got the oversold cross saying it is time to head higher, the other indicators disagree with it.

The 5 day moving averages of the open and close have not crossed over yet. We may see that cross but I will be skeptical unless we get the signal as well in the SVAPO. It is getting close to where a signal in SVAPO should occur, but the volume will have to pick up as well. Still believe this is a slight upturn during expiration week and will turn on a dime and go back down early next week.

December 17. 2007 - Market Recap

Wanted to focus on the S&P 500 and the Nasdaq today. Notice how the December 4th low was broken today the only thing stopping this from continuing down is the low the last week in November. Since this is options week we will see if some pinning starts to occur. The SVAPO is heading back to oversold, and then we should see a trun in the MA(Open) and the MA(Close) switch positions and start back up. At that point it may be appropriate to initiate some trades. This chart with the Nasdaq is interesting because we are getting close to the Novemver low and the next resistance will be the August low, which I put at 2460 if you look at a longer based trendline. The other item to note is that presently for this down trend we are not seeing the volume that we had in the past. I added a 50 day moving average on the volume graph. Notice the other drops had large volume. We are not experiencing that so far so this may be the last downtrend for awhile. People may be looking at there portfolios and worried about the tax implication. We may have to wait till January for a continued down trend.

The next graph is the % of stocks on the Nasdaq above their 50 day moving average. Notice it is not quite as low now as what it was in September but we are getting close. The item of more interest is the % of stocks on the Nasdaq above their 200 day moving average. The bears have been in control for a while, and I expect them to stay there for a while. Once the 200 day broadens then will be a good entrance criteria for going long.

December 12, 2007 - Market Recap

Only going to show two charts today. The first if of the S&P 500 and some of the technical indicators. The upper chart shows the trendline. Notice how there is a faster trendline down and then a pull back up to the slower trendline. The SVAPO turned the day before the Fed Announcement, with a sell signal. Notice how today the 5 day MA of the Open and the 5 day MA of the close crossed to say that we are in another down trend. The OBV has also been very flat. There was a alot of fluctuation. Stocks opened up much higher but the Bears dominated the Bulls after the early rally.

The second chart shows a classical Elliot Wave on its last leg going down. I labeled the 4 legs going down. If you look closely you can see 5 waves going down on C and 3 waves going up on D. This would imply that there should be 5 more segments going down to form the E Wave. This would take us to 690 to 730. That is where the Russell 2000 should go.

December 7, 2007 - Market Recap

The DJIA has retrace to 5/8 of what it went down. The problem is that it looks like it has 3 wave going back up. This would mean that the next drop could take place. With the light volume and the open and close being about the same, it should start to go down.Notice how the S&P 500 has pulled up to the down trend line. I would anticipate it turning back down. This is what was predicted in an earlier post.
The Russell 2000 also is showing the same thing. It should turn again tomorrow 12/10 and go back down.

HD Review

Wanted to show a couple of graphs of Home Depot. The first is the trend lines. I am expecting it to go to at least 32 before it either breaks up or turns back down.Also notice the OBV it has flattened out and is looking like it will turn. It shows that there is a divergence between price and OBV. It should be making a turn now.

December 6, 2007 - Market Recap

The DJIA rallied today and although the volume was not as strong as it should have been for an uptrend to occur. The OBV did not break out. The S&P did not break above its down trend line yet. It also did not go back to the 38% retracement. It could still turn tomorrow depending on the employment report.
As the chart shows the volume was not real high for the Nasdaq either. It did cross over the 55 Moving average line. It will be interesting to see if it stays above the line.
The Russell did not break the trendline either. But it is back in the congestion zone between 780 and 800. It has been there before for several periods.

December 3, 2007 - Market Recap

The DJIA turned back down a little bit. On Friday it bounced off of the longer term trendline. This should consolidate up against the higher trendline before turning down for 13 days, and going well below the 12,800 level. The Stochastics are all over bought and showing a turn. It was light volume, people are waiting for the Fed anouncement on interest rates.
Very similar picture on the S&P 500.
Very similar with the Nasdaq. Once again it bounced off of the longer term down trendline.

Finally the Russell 2000 bounced off of the fibonacci levels. Expect it to go to 710 before it turns.

November 2007 - Monthly Recap

Shown is the weekly graph of the DJIA. The blue line is the 13 week moving average. It will provide resistance for the trend going up. It appears to be a double top and the weekly chart should turn and go backdown around 13,600. If it does turn expect it to continue down.
The S&P 500 shows very similar results. Anticipate it going to 1500 and then turn. The stochastics are both showing oversold and should be purchased now. Once again the 13 week moving average is fairly flat.
The Nasdaq may consolidate for a while but then trace out a head and shoulders pattern and go back down . The shoulder will be at a little above 2700 and then will make a sharp turn back down.
The last one is the Russell 2000. Expect the price to be slightly above 780 before it turns down again. I will be watching for the change to start selling short.

In general we are in a downtrend and should be treated as such.