xjo weekend zoomba lounge, page-31

Saturday Morning wrap-up.

In America:

Dow Industrials +0.26%
Dow Transports +0.67%
SP500 -0.03%
Russell 2000 -0.21%
Nasdaq100 -0.59%

Comment: A mixed day with a lot of bearish candles in place. Nasdaq100 was particularly weak compared to the rest of the market largely because of a down day on Apple. It continues to give me concern. (See chart below.) The good news in America (unemployment below the magical 8% for the first time since Obama became President) was, perversely, bad news for the market. But then – the market was set up for a pull-back. Market reversals on good news are cause for concern

NewHighs/NewLows 310/6. NH>NL. The ratio of NH/(NH+NL) is at 98.1%. In the Do Not Sell Zone. The percentage reading (98.1%) is the highest since the recent top in the SP500 on 14 September. The percentage reading back then was 98.6. Rarely do readings occur this high. The contrarian in me is getting worried.

Technical Comment on the SP500:

The SP500 finished at 1460.93. Support/resistance: 1418/1466
MACD Histogram. Above zero. Positive.
MACD. Below zero. Negative.
RSI.9 is at 64.3. Positive. In a zone where pull-backs can occur.
Stochastic. 68.7. Above its signal line. Positive
CCI.14: +111.3. Overbought. (CCI is usually the first indicator to give OB readings.)

The medium term trend is up. The short term trend is up. The chart remains within the medium term uptrend channel.

The Index rose above horizontal resistance at 1465.8 and failed. The candle is a “hypodermic needle” indicating selling pressure. That’s bearish at an important resistance level. A big down day on Monday would confirm the short term bearish reading.

Major divergences appear to be setting up on momentum indicators. They suggest that the risk/reward ratio for entering the market now is not propitious.

Apple Inc.

Yesterday, I mentioned that Apple appeared to have formed a bearish flag – at the confluence of some important chart points. Last night it broke down from that position. It still hasn’t broken the low of 2 October. So optimistic bulls have some hope. But not much.

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