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12. August 2008 by admin.
Tuesday,
Markets sell off as concerns over the financials come back into focus…
The DJIA gives back 139 points for the day, but with today’s candlestick formation there is no hope of a quick rebound higher tomorrow… The slow stochastic indicator is still short-term overbought at 84.75. The momentum indicator on the MACD is showing a pullback is in effect, and though we may see upside attempts as the market still believes this is a bull market rally (which we disagree with), the end result of the situation would be limited upside with huge downside potential still on the charts. The smart play continues to be the short opportunities in my opinion.
The NASDAQ lost only 9 points for the day and though bulls may like that, I suggest a review of the situation as the short-term overbought conditions do not suggest further upside to be promising. The slow stochastic indicator remains at 90.87 (heavily overbought) and the RSI is at 61 which would limit any upside potential regardless of bull or bear view point. Today’s candlestick formation being a Doji, is less than promising for bulls as the wick from the top is longer than the wick from the bottom and this only confirms yesterday’s inverted hammer (sell signal).
Today’s MPT (Market Power Trend) Rating, which tells us what “Smart Money” is doing in the market and where support/resistance is came in at (02); this indicates we are likely to fall lower before attempting to bounce higher in the overall markets. And as consistently shown there is no “Smart Money” buying going into these pullbacks in anticipation of a long lasted bullish rally – in fact “Smart Money” is selling the rallies in equities.
As Always; Be Smart, Be Patient, & You Will Be Successful.
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12. August 2008 by admin.
Monday,
Markets rally and then sell off forming the inverted hammer sell signal across the board…
The DJIA closed up more than 48 points but the day’s candlestick formation is an inverted hammer on low volume. The slow stochastic indicator is at 79.33. Can the markets rally higher from here, sure but the technical signals don’t lie and in hindsight today’s major market average sell signal will make good since. The upside potential from here is limited with the current slow stochastic reading, but these low volume rallies tend to continue higher until the other shoe drops so to speak, and once that news or sell off starts we will see this entire technical set up shatter.
The NASDAQ rallied +25 points today, but again the candlestick formation is warning that this thing is overbought but at this point it does not matter whether you are a bull or a bear we should both agree this market needs a pullback as the slow stochastic indicator is at 88 (anything over 80 is over bought), today’s close was sell above the upper BB line, and the RSI indicator is (to be used to note very overbought/oversold conditions) at 62.94 – one way or the other I see a peak this week, if today was not already it.
Today’s MPT (Market Power Trend) Rating, which tells us what “Smart Money” is doing in the market and where support/resistance is came in at (01); this support indicator at this level does not provide any real guidance, but it does continue to show we have no smart money buying at these levels… I maintain this is nothing but a bear market rally, on low volume during summer months with no institutional support behind it. The news is bearish and the rally will pay the piper sooner or later – sell the rallies, and ride the fall with a short.
As Always; Be Smart, Be Patient, & You Will Be Successful.
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