Thursday, March 23, 2006

Make Up Your Mind!

Friday: Up.

Monday: Down.

Tuesday: Down.

Wednesday: Up.

Thursday: Down.

Can I buy a trend, please? Man!

So the Dow was down today, which brings the change over the past five days to basically nothing. It would be really sweet if we could get some clear direction here, people!

Anyway, here are a few charts to chew on. First up is the Amex Major Markets, symbol $XMI. This is actually a pretty hefty inverted head and shoulders pattern (not shown here) which, if broken to the upside, would be very bullish (yes, bullish) for this market. Indeed, the price did cross above the neckline: but it took the very bearish behavior of slumping back below the line and, since then, sinking further still.


The Dow Transports (The Dow 20 to those really in the know.....) has been profoundly strong, but it, too, lost its grip on its ascending trendline and took a dive (these are intraday charts of about the past ten days).


Next is the S&P 500. Same deal. Ascending trendline. Couldn't keep the momentum. Started falling. It's going to have to punch through Wednesday's low, however, to get exciting for the bears.


Lastly, the NASDAQ 100 ($NDX). Considering the weakness today, this one was stronger than I'd like to see. As with the S&P 500, this index has to punch below recent lows (in this case, March 10) to get serious about a downfall.

4 comments:

kapil khanna said...

Although the averages were down today, they were on lower volume. The 9% jump in Googles price after market, is going to have a positive effect on the market opening tomorrow.
Looking at the market action for past 5 sessions, the dow has barely moved 150 points, but the volume has been above average. This is usually a sign of distribution. Very high probability we have an intermediate top.

Anonymous said...

Mr. Knight.. Who knows what the heck is going on? Everything I see - in a broad sense - points to market decline, widespread and long-lasting, but the price action refuses to cooperate. Friday will tell us nothing. Have a great weekend.

nodoodahs said...

http://finance.yahoo.com/advances

Looks like another strong day to me. Ho, hum, another week, another five days of the SPX trading above key resistance that was met twice in the last three months before being climbed over, another five days of the DJI trading above 11200, and the Nas, well, let's just say its ascending trendline goes back to 2004 and it has key support at 2200 and 2150.

When commenters resort to insults, it usually means they don't have a factual argument. I'm long, and I think it would be unwise to be short the overall market in this current bull, but should you choose to do so, I won't be calling you a "moron." Reasonable people can disagree without being unreasonable about it. Or can they? You decide.

There's no right or wrong side of the market, only a profitable side and an unprofitable one. Which one, long or short, has been profitable over the last three days, three weeks, three months, and three years for the three major indices? That's fifteen good reasons to trade bullishly, even if you're a permabear.

I think a falling dollar might be good (or at least not too bad) for U.S. equities. What did the dollar do in 2003? What did the S&P 500 do in 2003? Hmm ...

kapil khanna said...

pb,
opinions opinions opinions. Study the market action, not what you think the market ought to be doing :).