30th: More of the same from tech [NASDAQ and NASDAQ 100] and small cap [Russell 2000] indices as channel support held. The semiconductor index was the days star performer as it regained 478 support - helping to build support in tech markets. The tech secondary indicator, $BPCOMPQ, added its weight to tech support as it breached the August-September resistance line, removing one of the key supply areas for this indicator. The whipsaw friendly $NAA50 is back in the green after an earlier 'sell' signal. Large caps [Dow and S&P] were the real losers on the day as each lost their channel support, although the 20-day MA is fast coming to the rescue and should act as support in these indices. Technically, the only sell signal came in the MACD trigger line of the NASDAQ 100 (although the NASDAQ also looks vulnerable in this regard); but there is as yet no confirmation in this signal from on-balance-volume or slow stochastics.
Target hits: CELL was a Gold Member pick for November 1st which hit its target price after closing on a bearish shooting star; a good time to take profits if long. The stock closed for a 34% gain.
Stop hits: AIC featured as a Gold Member pick for October 13th and a breakout for November 23rd. The former closed for a 3% gain, the latter a 11% loss. BBSE was a bulletin board play from November 29th which failed to follow through on its breakout although it did end Wednesday on a bullish hammer. The play closed for a 12% loss. LRCX clipped its raised stop - although the stock closed on a bullish doji. The play looks to have suffered from an overly sensitive stop. The stock featured for November 21st and October 14th. The former play closed for a 2% loss, the latter a 9% gain. PBY was another stock to get hit with a sensitive stop price as the stock retreated on low volume to negate its earlier breakout. Support at the 200-day MA held into the close. The stock featured for November 25th as a breakout, closing for a 4% loss. It also featured for September 28th and this play closed for a 4% gain. ATSN was a Gold Member pick for November 25th. The stock hit its stop price after the fourth day of selling in a row. It closed for a 9% loss.
29th: Bulls could take some measure of comfort from Tuesday's action as markets failed to topple over themselves into a slew of selling; instead, positive economic data kept in check any killer move by the bears. Technically, markets are holding support as defined by narrow (and sharply ascending) channels drawn from October lows. Even the vulnerable Russell 2000 managed to cling on to channel support. Tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] continued to slow as trendline resistance in the $BPCOMPQ and $NASI strengthened. Volatility is also starting a new uptrend - although there have been many false dawns in this indicator as it sits at historically low levels. Whether bulls can hang on remains to be seen. Tuesday did rank as a distribution day in the NASDAQ and NASDAQ 100, but the measure of loss was not extreme and the semiconductor index has held up relatively well, even though it lags the key tech indices. Large caps [Dow and S&P] had a quiet day with little change in their technical indicators. Markets do sit at a point for profit taking and this in itself marks a top. What happens on the retest of last week's highs will be interesting. As I mentioned yesterday I thought we would have a sharp drop and bounce, but Tuesday's action did not lend itself to such a decline. A test of the 20-day MA is a definite; but whether this moving average comes to the market, or the market drops to the average is not yet clear. Next to look for will be how the indicators sit with respect to the next reaction high - will there be divergence in the technicals on a new high in price? If markets were to hold tight to last weeks highs then perhaps not, this would favor another leg to the rally. If such a rally were to materialize it would likely be a blowout rally to top finish the 4-year October 2002-2006(?) bull cycle. Next year's House elections could be the sell-on-the-news event to complete the top. Speculation for now but current action could be the seed of this final rally.
Target hits: none
Stop hits: AFFX featured for November 22nd but suffered its fourth day of selling in a row to hit its stop price for a 6% loss. VIGN was a Breakout feature for November 14th and closed for a 9% loss.
28th: No surprises on the day's sell off as we started the 'told-you-so' pullback. Watch for a short sharp correction back to the 20-day MA before markets can attempt a low volume retest of last week's highs. The retest of the highs should create the bearish divergences in the MACD, slow stochastics, on-balance-volume and secondary
indicators [$NASI, $NAA50 and $BPCOMPQ] to complete the top. The $BPCOMPQ has reached resistance as defined by the reaction highs of August and September, as the $NAA50 flipped to a sell signal; although both indicators still hold bullish technicals. My breakout page is rather sparse on quality with penny stocks the predominant bullish plays (= rampant speculation; topping behavior). The real loser on the day was the Russell
2000 - the one index that needed to hold on to its prior lackluster gains was walloped by profit taking. There is some support nearby as marked by the sharply ascending channel illustrated on my chart, but it is unlikely to hold out for long. The large caps [Dow and S&P] were least affected by the selling - another sign of rotation into safety and a further sign that a top is in place.
Target hits: GTE featured for November 17th as a Gold Member pick, rallying to hit resistance and its target price. The stock still looks to have legs, but taking profits here would do no harm. The stock closed for a 42% gain.
Stop hits: none
26th: There was not too much we could take from the
last two days of market action. A big sell off was unlikely during
the holiday period (barring a major world event) so the coming
Monday/Tuesday's action should set a course for the markets into
Christmas. Markets are in need of a pullback and their respective
20-day MAs looks the most logical place for support. It remains
a traders market - buying-to-hold at these levels remains a risky
venture. Commodity-based stocks (energy and precious metals)
will likely provide the best long term (investment) opportunities,
although commodity prices, like general equity markets, are close
to completing a 4-year bullish cycle. Whether markets enter the
next 4-year bearish cycle with a strong downtrend, or (more likely)
further sideways action with a bearish bias will depend on the
future health of the global economy.
At least for now there is no immediate reason
to sell; technicals as measured by the MACD, on-balance-volume,
ADX, and slow stochastics remain bullish, and the secondary technical
indicators [$NASI, $NAA50 and $BPCOMPQ]
are holding a bullish bias; 2006 could be an interesting year.
Target hits: none
Stop hits: ADTN featured
as a short play for November
16th but managed a counter move to break above the 50-day MA
and declining resistance from October to hit its stop price. The
stock is a good long side play with a stop around $28.88 and a
price target of $54.
22nd: More gains for the markets on strong accumulation
volume as the fed
minutes revealed rate hikes will become more sensitive to
incoming economic data on the risk of "going too far with
the tightening process". The increase in volume was unusual
for a Thanksgiving week and it will likely taper off into Friday's
action. On the technical front there was a resistance break in
the MACD trigger line and on-balance-volume of the NASDAQ -
a confirmation of bullish strength. New 6-month highs in on-balance-volume
and the MACD trigger line were also found in the NASDAQ
100. The semiconductor index
continues to lag the tech indices but there was enough momentum
to break 478 resistance but 486.60 resistance held into the close
of trading. Of the large caps, the Dow marked
a breakout in on-balance-volume as part of an earlier resistance
breakout in the MACD trigger line, following an similar move
in the S&P.
The small caps, Russell
2000, closed over 682 resistance, leaving 688 the last point
of supply for this index - but small caps still lag the other
The longer the markets continue in this vein,
the closer they map the 'Santa' rally of 2004. Unfortunately this
rally could run out of steam before Christmas - although there
is nothing in the individual technicals of the markets (on-balance-volume,
MACD, and slow stochastics), or the tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ],
to suggest this collapse will be tomorrow. Hold and trail stops.
Target hits: none
Stop hits: HIV clipped
it stop after a relatively heavy volume day, but the stock remains
neutral (for now). The stock featured for October
24th as a breakout. AITX hit
its stop after a promising start (max gain of 16%). The stock featured
as a Gold member pick for November
2nd. SINT was
another oversold play to hit its stop following 4 days of weakness.
The stock featured for November
9th. SPTN was
a short play from August 5th which
has been covered early due to increasing technical strength. The
play closed for a 16% gain.
21st: Not a bad day for the markets; the bearish black
candlesticks in both the NASDAQ and NASDAQ
100 were negated by Monday's gains; both large cap indices
[Dow and S&P]
chalked up strong gains; the Russell
2000 similarly did not disappoint, although it still lags
the other indices - on the plus side, the bearish divergence
in the CCI was negated.
Volume was on the limp side which can be viewed
as a mixed blessing - on the negative side there are fewer buyers,
on the plus side there is plenty of sideline money wondering if
they should join in. Technically there are no signs of weakness
in any of the markets and the secondary tech indicators [$NASI, $NAA50 and $BPCOMPQ]
continued to advance. Hold current positions but remain wary on
entering new positions.
Target hits: none
Stop hits: RJET featured
as a Gold Member pick for November
7th, crashed through its stop price for a 7% loss. NCR was
a Gold Member short play from July
1st which was covered for a 13% gain.
Model portfolio: CTCH added.
Nov 19th: We
are starting to see a series of gaps appear in the tech markets
[NASDAQ and NASDAQ
100] which is often a sign of exhaustion runs. The increase
in volume is another sign a rabid buying; soon buyers will run
out of ladder rungs to climb. Friday's black candlesticks in
both tech indices are common tops under these conditions; when
are unable to maintain early day enthusiasm and succumb to selling
pressure as the trading day wears on. The lack of consolidation
in these markets makes finding support harder to define. At least
for the NASDAQ
100 there is clear support at 1,628, for the NASDAQ it
is nearby at 2,219 but it won't take much selling pressure to
break this support. At least on the technical front there is
sign of weakness; MACD, on-balance-volume, and slow stochastics
are strong with no hint yet of bearish divergence (which will
need a retracement and higher high in the market, and lower high
the technical indicators - so this in itself is bullish). The semiconductor index
added its weight for support with a solid break of resistance
as secondary tech indicators [$NASI, $NAA50 and $BPCOMPQ]
The large caps continued their advance. Both
the Dow and S&P sit
in clear air, breaking outstanding resistance without the runaway
gaps of the tech indices. There is more substance to the buying
and there could be further support as money rotates from tech issues
to more 'low risk' large caps. Small caps still have work to do;
2000 closed the week above channel resistance, but there isn't
the same level of demand as there is for large caps, or techs.
Bulls need to tread carefully here. There is no bull market without
leadership from the small caps; large cap rallies come in mature,
late cycle bull markets - such as we have now.
It doesn't take more than a quick scan of the
headlines to see the various pressures acting on the market: 
higher commodity prices - not just in oil, gold, or sliver - take
look at copper prices;
the raw material of the tech industries, there is little sign of
a slow down here and it will impact on the bottom line in term
of earnings and consumer pricing,  weak government - markets
hate one-party politics, next years elections should see Democrats
take control of the House and markets will react positively to
the news - but that's a year away,  excessive government spending
- Iraq, and Katrina relief, will be a constant drain on limited
resources, unless the printing presses start rolling overtime which
will add to  inflation - not the government speak version, real
inflation; think of the costs of cinema tickets, eating a meal
out, airline fares (do you really think the airlines are going
to drop the oil surcharge?), CD prices, public transport tickets,
even the humble stamp price. Too many dumb people in power, and
too many spinsters to spread the word that everything is fine.
Don't believe the hype, which leads to  rising interest rates,
even if the Fed stops raising rates don't expect everyone's pains
to go away. Mortgage's still have to be paid and salaries are unlikely
to rise fast enough to cover the increase. Add to that a credit-consumer
society, and an ever expanding demand servicing monthly contracts
(mobile phone, cable, utilities) and it is not to hard to see where
the cash crunch will come from. Now ask yourself where do markets
go from here?
There will always be opportunities to make
money, but it will likely not be in the sectors the TV hypsters
want you to believe it will be. Commodity-based securities remain
the best bet for the long haul as an investment (i.e. for retirement
accounts). Alternative energy and biotech should also be strong
and a good area for speculators. Big pharmaceutical companies will
rebound for those who prefer large cap stocks. Going back to commodities,
commodity prices are very close to hitting a '4-year cycle top'
(oil may have done so already). If you look at the long term charts
for gold and oil, you will see oil started
its run from early 1999, whereas gold started
its move in 2001. Prices in these commodities could retrace substantially
(fibonacci retracements up to 62%) over the next '4-year cycle'
period - this should not be viewed as the end-of-the-line, but
as probably the best opportunity to accumulate stocks in these
sectors for the next (likely largest) leg of the rally. A hurt
world economy will take its toll on commodity demand and lead to
falling prices, but once the various players start ramping up production
it will become a race to buy ever scarcer (and more costly to extract)
Target hits: none
Stop hits: none
17th: Bulls put the bears to the sword with solid gains
all round. The only index to miss out on the action was the semis,
which is all the more surprising given the leadership in the NASDAQ
100. The NASDAQ managed
to close a point over 2,219 resistance on higher volume, registering
a belated breakout relative to the NASDAQ
100. The Russell
2000 finally managed to break from its declining channel,
clearing the four point line which comprised channel resistance.
Next up was the S&P and
the Dow -
both marked breakouts: the Dow finally
closing over 10,700, the S&P closing
above channel resistance of its own. Technicals remain firm in
all markets with no hint of bearish divergence, therefore it
would not be unexpected to see new highs off the next pullback
(when it comes). This is the good news. The bad news is markets
remain overextended in the short term; the prior three days of
pullback really didn't do enough to shake the weak hands and
we can expect retail buyers to continue to drive a 'Santa' rally
with the Big Money happy to sell into them. This does not mean
one can't make money following this trend. Contrarians will consider
the consensus for a pullback (I haven't seen many commentators
recommending a buy here) a reason enough for this rally to continue.
What to do? Trail stops on all positions and if buying, buy stocks
with a relatively low capital risk. For my breakout plays I am
featuring current Gold Member picks from this summer and fall.
Target hits: none
Stop hits: ADCT was
a short play from August 18th but
its heavier volume rally through the 200-day and 50-day MA is reason
enough to switch to a longside play. The play closed for a 9% gain. IWA was
an oversold play from November
7th which continued with its break of support yesterday.
16th: Gold and silver were
the flavors of the day as inflation concerns bit the market.
Because of this I have featured a couple of gold stocks in
my free breakout section;
not including those available on my public Stockchart.com
list: GFI (I
hold a position in this), BGO, KGC, SSRI, SIL,
Bulls attempted a stand at a number of different
levels; in the case of the NASDAQ it
was the reaction highs of September, for the Russell
2000 it was at the 20-day/50-day MA, and for the S&P it
was October reaction highs. None of these levels look particularly
compelling given the overbought nature of the markets. However,
the position of the NASDAQ
100 does fit with bullish action; as long as 1,628
holds as support bears will have a tough time shaking the apples
from the tree. Unfortunately, it is a lone beacon in the night.
Secondary indicators [$NASI, $NAA50 and $BPCOMPQ]
are hanging on to their net bullish status - although the $NAA50 flipped
Target hits: none
Stop hits: LWSN as
featured for October 18th hit
its raised stop on the second day of selling for the stock; it
closed for a 1% gain. PMACA over-stretched
its pullback to hit its stop for a 7% loss - although with the
50-day nearby at $8.66 it is not dead-and-buried with respect to
the bulls. It featured for November
7th. LYO Gold
member long signal from August
26th was stopped out on the downside price break from the triangle
consolidation. Look for a retest of $24 The long play closed for
a 4% gain. RAVN was
stunned by a major sell off; not only did this stop out the Gold
Member play from November 1st but
also the long play from the Model Fundamental Portfolio.
15th: The bears took the first shot as they chipped
away at bullish resolve. The real hit came in the Russell
2000 as yesterday's losses accelerated. Not to be excluded,
the Dow managed
its own day of disappointment with a failed attempt to break
10,700. Volume crept higher in all markets, signaling a day
of distribution (i.e. Big Money selling) in all markets. For
the S&P this
marked the second day of distribution in a row. The failed
test of resistance yesterday and Tuesday's selling pressure
have forced many short term traders to switch from long to
short. Long term buyers and investors will look to the secondary
[$NASI, $NAA50 and $BPCOMPQ]
with interest; so far only the $NAA50 has
indicated weakness. Given technicals of secondary indicators
have breached a number of important resistance levels there
should be more support for current long side positions than
for the two previous October 'buy' signals.
Target hits: none
Stop hits: GPXM featured
as a penny play for September
26th but it failed to set the world alight, closing for a 17%
loss (such is the risk of penny stocks). MEDI was
stopped out from its raised stop. It looks set to test its 50-day
MA; the stock featured for September
8th, 26th October, and November
11th as a Breakout play, and as a Gold Member play for April
22nd. The Gold Member play closed for a 34% gain. The Breakout
plays closed for a 15% gain, breakeven, and a 4% loss. CA was
a Gold Member feature for September
24th way back in 2004, but it failed to set the world alight,
closing for a wimpy 6% gain. CHAR was
a short play from October
13th which managed to rack up a 26% gain before rallying to
hit its stop, resulting in a 13% loss.
14th: The holiday Friday extended into Monday with
some lackluster trading. The chief concern on the day's action
the reversal off resistance in the Russell
2000; all of Friday's narrow gains were gobbled up leaving
behind a bearish engulfing pattern - not the kind of action
you want to see at resistance, and certainly not the leading
of a bull market.
In terms of volume action there was modest
accumulation in the Dow;
but the 11 point gain which did enough to register the gain, was
not enough to push the index over resistance. The S&P's
1 point loss registered its slightly higher volume as distribution;
but like the Dow,
the S&P couldn't
break resistance. This form of action is typical of churning as
the smart money offloads to the dumb money. The smart money can
easily jump back in with little net loss if there is enough buying
momentum to continue the rally beyond resistance.
Bulls can take heart from the NASDAQ
100 which has so far maintained last week's breakout, but
will be pressured by a struggling semiconductor index
and a relatively disappointing NASDAQ.
Everyone appears to be waiting for the pullback, but no one is
too keen to set the ball rolling - in case they get left out
of the next upward surge.
Target hits: none
Stop hits: MHX got
clipped with its overly tight stop. The stock was a Friday feature
for Monday - it registers
as a 5% loss.
11th: A holiday Friday was never going to set the
markets alight and it was interesting to see prices drift upward
of down, as is oft the case when there is an absence of buyers;
a retail driven rally such as Friday's leaves markets vulnerable
to Big Money selling. What was important for today was where
markets finished the week at; channel resistance for the S&P,
10,700 battle line for the Dow,
and channel resistance for the Russell
2000. The NASDAQ still
hasn't advanced enough to challenge new highs, but the day's
light gains were a step in the right direction.
Target hits: none
Stop hits: none
Model portfolio: NTRI reached
its price target for a 44% gain.
10th: Full steam ahead??? Thursday's buying had the
looks of too much, too fast - but there was one aspect of the
days trading which was unmistakable: the breakout in the NASDAQ
100. Strong bull markets need tech and small caps to lead;
certainly tech is doing its bit (the NASDAQ sits
some 25 points away from a breakout), but small
caps are having a rougher time of it. What the markets
need most of all now is for 1,628 to hold as support in the NASDAQ
100 while the Russell
2000 works a breakout. Focusing on the large caps is not
so important in the early stages of a rally. In defense of
the large caps, both the Dow and S&P had
solid days; opening near the days lows, but rallying to exceed
not only yesterday's shaky highs, but the highs of the last
few days on strong volume.
What one doesn't want to see is a 'bull trap'
in the NASDAQ
100; such an event would quickly kill attempts by other markets
to rally, and send prices scurrying back to October lows. I have
not mentioned the secondary indicators [$NASI, $NAA50 and $BPCOMPQ]
since the bottom was confirmed on November 2nd - this is simply
because there is little to say about them at the current time.
One interesting side show is the increasing strength in the precious
metal sector, most notably in the silver stocks (PAAS, SIL,
if you want to play safe - these look the best place to be.
Target hits: none
Stop hits: CKH featured
for August 11th and closed
for a 7% loss after earnings failed to
set the world alight. ABNK was
a short play which finally hit its stop after weeks of tight action.
It featured for September
21st. ASPM finished
the day on a bullish hammer, but not before the November
3rd play hit its stop. The closed for an 8% loss. TSAI was
a recent short from November
8th which crept over its 50-day MA and therefore its stop.
9th: Wake me up when this is done. Large caps are
closer to a reversal as early gains during the day couldn't
the Dow and S&P ended
the day near its lows. The tech indices [NASDAQ and NASDAQ
100] marked little change; although bulls will take heart
from improving strength in the semiconductor index
- its close over the 50-day MA sets upper channel resistance
as its next price target. The Russell
2000 closed up slightly, but no failed to challenge resistance,
or test support.
Target hits: CENT was
a featured short play from August
29th it reached its target for a 18% gain.
Stop hits: HLF featured
as a Breakout play for November
7th, it closed for a 4% loss.
8th: We are looking set for a quiet week into the
long weekend; on the negative front there is housing woes;
on the positive front there is declining oil
prices. Bulls will want to see how recent gains hold, while
bears will want to see broader weakness before getting gung-ho
decline. The likely net effect is for low volume declines into
the end of week, with the action picking up next week. Thursday
could provide a nice buying opportunity if markets dip into
the light zone marked in my public Stockcharts.com list
- but it will take two big down days to do so (not necessarily
on heavy volume).
Target hits: none
Stop hits: DFG featured
as a short play for Tuesday but
got whipped on its tight stop - the stock remains bearish.
7th: Not much to add to Friday's events - still awaiting
a pullback to mark a buying opportunity. The lighter volume
leaves fewer bulls partaking in the buying which will catch
this market sooner rather than later. Only the Dow registered
an accumulation day which could still see a test of 10,700.
On the laggard front: both the semiconductor index
2000 failed to take advantage to catch up with the tech and
large cap indices.
Target hits: none
Stop hits: ARBX actually
stop hit yesterday but it actually looks better for bulls on today's
action. Featured for November
5th: Markets finished the week on the up, pushing
through a number of resistance levels and leaving the markets
for further gains. Technicals sit in the green in all markets
with the exception of the semiconductor index;
weakness in the semis lingers like a bad odor in an otherwise
improving market. The question now is how the next pullback
will unfold; will it maintain techinal strength? or will a
retreat force prices below October lows? The secondary indicators
[$NASI, $NAA50 and $BPCOMPQ]
have completed all points to form a bottom. The nature of this
bottom will play it itself over the coming months, but the
status of the secondary indicators at the time of the revesal
lend itself to a lasting rally. In any case, long side plays
will have the strongest merits.
As for individual markets; the NASDAQ
100 is on the verge of closing at new 52-week highs and has
adopted the role of leader (a good sign in a nascent rally).
The point-n-figure chart triggered a spread triple top breakout
on Nov 3rd with a target of 1,820. The NASDAQ switched
to an ascending triple top breakout on Nov 2nd with a price target
of 2,250. Channel resistance was breached in both tech markets.
Pullbacks to the 20-day MA (based on current fibonacci ratios)
will provide opportunities to take long positions in these markets.
Large caps closely follow the tech indices; the Dow ended
the week above its 200-day MA, the S&P above
its 50-day MA. The Dow has
struggled in the 9,700-10,700 range for the best part of two
years and won't generate much excitement until this range is
comprehensively breached. Even with these lingering doubts the Dow triggered
a triple top breakout on October 31st with a target of 11,200.
The S&P still
has channel resistance to breach and hasn't the same support
levels to fall back on as the tech indices do. Another index
which unfortunately hasn't adopted the role of leader is the Russell
2000 and sits in much the same predicament as the S&P (with
intact channel resistance).
Precious metals continue to pullback in an
orderly fashion; look for gold to
make its way back to the 200-day MA while silver has
both the 50-day and 200-day MA to catch its fall. Precious metal
stocks have lead base metal prices in their decline, although some:
have remained strong.
Target hits: none
Stop hits: AZPN was
a Gold Member pick for September
29th. The stock closes for a 6% loss. BDN was
an oversold play for November
3rd which hit its stop for a 3% loss. MNTG hit
its stop after it featured for October
2nd: The good days keep on rolling for the bulls as
another layer of resistance was peeled away. Solid volume was
the icing on the cake as green became the color of the day.
Even the semiconductor index
joined the fun as it thrashed through its 200-day MA to close
the day at its 20-day MA. However; channel resistance in the NASDAQ,
but not the NASDAQ
100 interestingly enough, will give the bears another opportunity
to stall things Thursday. Unfortunately, it is weakness in
the semiconductor index
which keeps a lid on wild enthusiasm for the rally. The large
caps: Dow and S&P,
continued their good work, although the Dow spent
another day below its 200-day MA. The Russell
2000 also managed to clear 648 resistance and its 50-day
MA, brining channel resistance around 670 into range. I don't
know if it is good or bad to hold a niggling doubt about the
merits of this rally; I will be more confident once I see what
shape the next pullback makes. Tech and small caps have to
lead and other than the NASDAQ
100 I am not seeing this broad leadership.
What also makes me edgy is the failure of the
tech secondary indicators to reach deep oversold territory; the $NAA50 managed
it (if a little erratic), but neither the $NASI nor
the $BPCOMPQ reached
a level oversold enough to suggest this rally can last much beyond
Christmas. All three indicators managed a bullish cross of their
respective 5-day EMAs which is normally a good buy trigger when
all three are in alignment (as they are now). All three secondary
indicators managed a MACD 'buy' signal, with the $BPCOMPQ managing
to clear resistance as bound by its MACD trigger line, with the $NAA50 likely
to soon follow. In summary, market health is now bullish, and pullbacks
into the blue zones as marked in my QQQQs, DIAs,
and SPY charts
should provide decent long-side opportunities. Its a weak buy signal
given only one of the three secondary indicators reached a deep
Target hits: none
Stop hits: JUPM
1st: All three tech secondary indicators sit above
their respective 5-day EMAs, normally a sign of a bottom. I
for a confirmation break of MACD trigger line resistance in
the $BPCOMPQ and $NAA50 to
reduce the risk of whipsaw as seen in two earlier (false) signals
in October. Tuesday's Fed rate hike has left the markets at
a point of indecision as early gains were wiped out; but not
the extent a reversal was triggered. In the NASDAQ the
50-day MA continues to act as resistance. In the Dow prices
dropped below the 50-day MA but held support of declining resistance.
100 was a little more fortunate as the 50-day MA held as
support, but volume was lighter than Monday's and lower relative
to the NASDAQ.
2000 didn't budge from 648 resistance, nor challenged the
50-day MA. The semiconductor index
made modest losses to close further away from its 200-day MA,
and well away from its 50-day MA. Finally, the S&P did
little to threaten its 50-day MA, although volume did drop
from Monday's trading.
A bottom in November remains the most likely
scenario and the next pullback should provide some decent buying
opportunities. The semiconductor index
remains the index most likely to spoil the fun for the tech markets
and there will be a need for leadership from the Russell
2000 if one is to see an upside move longer than a simple relief,
or 'Santa' rally. I am looking for Gold Member picks to continue
to outperform my free Breakout selections as has been the case
for October (so far, although it is still early days).
Target hits: none
Stop hits: LEAP featured
as a breakout for August 15th and
as a Gold Member pick for July
25th. SPSS featured
as a Gold Member pick for April
19th, and as a Breakout play for July
25th, August 12th, and September
30th. The Gold Member play closed for a 30% gain, the latter
plays for a 9%, 1% gain, and a 10% loss. AXL just
hit its stop at the days lows; it featured as a Gold Member play
for October 20th, it closed
for a 5% loss.
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