BiggDaddy. Recently, I was giving my little granddaughters one of their regular lessons on the stock market and I thought it was time to introduce them to HotCopper. Naturally I led them to the best thread on the Forum - the XJO - and let them browse. (My four-year old is quite the independent reader. And she interprets for the three-old.) Of course, for wit and wisdom, they were enthralled by the Cranker of the Day. Then, they came up with a pertinent question: Why is he purple? hmmmm. Never really thought about it before.
In America:
Dow Industrials +0.04% Dow Transports +0.58% SP500 +0.41% Russell 2000 +0.85% Nasdaq100 -0.1% Comment: Dow Industrials and Nasdaq100 were flat while the SP500 was up moderately. It’s unusual to see this much divergence between the SP500 and the other two major indices. Breadth was good (R2K)
Nasdaq100:
Nasdaq100 is now testing the neckline of the Head/n/Shoulders formation. Key time. Indicators are mid-range so a break either way is possible. Yesterday I said: ”A pause here is, however, likely.” That’s what we got today. Next move will possibly decide direction.
NewHighs/NewLows 238/10. NH>NL. The ratio of NH/(NH+NL) is at 96%. In the Do Not Sell Zone. These are, once again, strong numbers.
Technical Comment on the SP500:
The SP500 finished at 1460.91. Support/resistance: 1418/1466 MACD Histogram. Above zero. Positive. MACD. Below zero. Negative. RSI.9 is at 62.9. Positive. In a zone where reversals can occur. Stochastic. 58.2. Positive. In mid-range. Can go either way. CCI.14: +99.9. Positive. Nudging the overbought level.
The medium term trend is up. The short term trend is up. A test of overhead resistance now looks probable.
Since the 7 September, the SP500 has been range bound between 1429 and 1469. The question now is: Are we seeing a triple top forming or is this consolidation before the next move up? Chaikin Money Flow is showing a clear negative divergence suggesting the past five weeks has seen distribution. That tilts the scales a little in favour of the “topping” thesis.
A lot of talk exists about what leads the market up or down. SP500? Dow 30? Nasdaq? Or can we look to particular bell wether stocks for a lead? Apple Inc? IBM? Apple is the largest company by market capitalisation in America. IBM is the highest priced stock in the Dow Industrials which is a price weighted index. I mentioned IBM in my market wrap-up yesterday. So let’s have a look at how it fared today:
Down almost 5% today. No wonder the Dow Industrials were struggling. Today’s fall was well telegraphed by the divergences on the indices.
The stock is now currently oversold in the short term. But it’s difficult to see how this can make a come back without a lot of work. Given that Apple is also under pressure? Well – the market might hold up. You never know. Uncle Bennie is doing his bit to keep it up. QE Unlimited.
Wheeeeeeeeeeeeeeeeeeeeee! This market is never, ever, ever, going down again. :)
(20min delay)