High & Low

Dow’s fall stopped at the possible neck line. Now it’s on its way back to MA200(8600). note that 8600 was a heavy Vol range in the previous tops, and the broke up of 8600 wasn’t great on Vol. Possible round top didn’t come with nice Vol peak. The pull back to 8200(previous low) is light on Vol too… funny thing is, even in the previous low (8200 range), CCI still in ~0 space, while this time, when Doc get close to 8200, CCI is clearly oversold. I treat it as a divergency, so the market should go up. How far can it go? I simply measure the same height…I know, I know, I am just lazy…

Naz looks stronger than Dow, as usual… Last Friday’s Vol doesn’t mean much to me tho, because of the window dressing. Gap closed nicely and we don’t see new low, not even an equal low…MACD is going positive and golden cross, I am guess Naz will form a new high soon, might possible touching the showed upper trendline.

A nice rebounce day for the market, as DOW is moving out from CCI’s -100 territory and MACD is picking up. Everyone is talking about DOW’s golden cross, well, too many people noticed that, so let’s ignore it for now. Today is only a rebounce because it’s up from the support level (yellow area) and the Vol is still kinda low consider it’s a big step north in the index. Still under MA200 and still not a new high yet, so hold on with your long positions for now, I will say, good days might still keep coming. Don’t chase into the market tho.. this kind of move is kinda risky under current market environment.

Believe or not, I like NAZ better than Dow, altho both of them are considered rebounce to me.. NAZ does look like having a new channel established as I mentioned earlier, which gives me more reason to hold on with my remaining 4Q calls, also NAZ’s golden cross already passed (nobody mentioned that, right?), and now it looks like NAZ got a support not only by the previous gap, but also the MA50 line as well. Be aware of the Vol tho.. it’s higher, but not high enough. Some money are still in the vacation mode, and we don’t know when the big sharks come back, which direction will they choose. so far.. just hang on there.

Again, ND is still there, so don’t be too aggressive.

Dow heads down to CCI’s -100 level before NAZ does, even the new low is not formed yet. in this ~8300 range, there is a supporting area waiting for the bears, guarded by the previous lows and MA50 line.. altho I don’t see a possible trendline guiding this move,  I do think the market can have a rebounce starting from here.. might not be a new high ahead, won’t be easy to break down directly from this level tho..

At the Naz front, index filled the gap as expected, surprisingly during the first trading day after OE, I’ve to say it’s long planned and now we can see how week the cross formed last Friday is…Naz got into CCI -100 level after Dow, and yet it is not a new low either. Lining up the recent 2 tops and I am trying to guess the new trend/channel for the near future, today might really be the day to establish a local low/lower band. Well, if it’s going to make a direct break down to 1660 level, then most likely another head and shoulder pattern will show up again…

Naz came across 3 d-days, then 2 huge a-days. due to the quad-wicky day last Friday, the Vol of the 2nd a-day might not be so reliable.  The ND still exist, from the channel side, I do see it broke under the lower band, it can establish a new, slower uptrend from here, but the gap still not closed yet. I’d like to see that close first. if that’s the case, we’ll most likely seeing MA50 to act as a support line.

Dow got 4 d-days and no a-day show up at all. There was an up day with decent Vol, but Dow didn’t gain much that day, bulls are exhausted pushing the index higher? and right after that day, we see MACD crossed heading downward, ND, as Naz, also exists in Dow. Dow also broke down under serveral trend lines. The next support level I am seeing is the 8400. However, last Friday’s increased Vol down day didn’t hammer the market downward, might be a good sign of stopping the current short term downtrend.

It’s been a long way down since last update on this blog. Market got hit by bad news one after another. Last couple days we have Fannie Mae, Freddie Mac and IndyMac’s collapse, I am thinking these might place a period mark for this run down. As the death of BSC starts the final battle of mortgage crisis, ends it with 3 major mortgage players is as perfect as a book can be.  The take over by Uncle Sam surely gives government more control on this mess. Letting the careless and greedy mortgage lender to pay the ultimate price is the only way to fix this housing market issue, yet the main focus should focus on the oil price which will impact the econamic as a whole: you don’t have to own a house or carry a mortgage to drive a car. Also, energy price will impact all consumer products as the production cost and shipping cost are going to rocket.

Back to the chart, DOW keep posing a nose dive, but RSI and MACD show slowdown on down side movement. Bears might just blowing out the final strike and try to smash the first one or two over-excited bulls. OE week is coming with major ER in the same week, there is no need for bears to place their bets on the table at this moment. JPM and MSFT’s ER may send out comfortable signal to the market then start a rebounce. Going with short is clearly not a good idea at this moment, start setting up some long positions on ETF might be good, the safest way, of course, is cash.

As previously mentioned, DOW and NAZ starts a long way down. Dow form a double top pattern, went down and broke neck line. Currently it passes the down side target and neck line got tested already as a resist, a new down move is coming soon. RSI/MACD/CCI having signs of temperately bottom, might be just waiting for Naz to lead a new round of down?

Naz also has a nice double top and neck line got broken as well. However the down side target still not reach yet. and neck line doesn’t got confirmed as the new resist at this time. RSI/MACD/CCI all showing NAZ is weak and in a smooth down trend. Well, don’t fight the trend, follow it…

Just back from the long vacation and start feeling the market again. Dow got hit by 5 D-days, and 3 D-days in a row recently. Previous support line around 12800 got penetrated within 2 major D-days. The re-bounce is week and lack of Vol. In May, Dow formed a double top and RSI showed weakness on that 2nd top. CCI still telling me market is in the bear mode. Bears have more excuse to sink the market down more, while bulls are having trouble to find reason to pump the index.

Naz shows just a little stronger than Dow. Holding its previous 2430 range support line and still stay on the uptrend channel. Tech even up with increasing vol days ago. However, it failed to make a higher high and was pressed down by a downward trend line. RSI/MACD shows weakness at this point. CCI gives a slightly positive sign, not sure how long will it last.

When turning my head over to AAPL, this leader in tech is slowing down and posing a more like for a dive soon. Does it mean that the tech is going to have a big move in the down side? If so, we really have a long way to go, since it might trigger another wave of bear attack.

My system still not showing me a buy signal from last Friday, but the market picks up strength and seems DOW found a trend line support on the day of 15th in Apr. CCI picks up, MACD positive cross is coming and RSI heading north too. Are we in good shape now? DOW 12838 will most likely tell us the truth.

After 7 days walking along the support line, DOW broke down with VOL when the GE news hit the market. We should be able to call out an alert then CCI stepped down into sub 100 area about 2 days before this drop, oh well, I missed that. Have to say my previous prediction for a squeeze was wrong at that time, and that prediction should had a death sentence on Apr. 7. MACD is posing for a dead cross (crossing right now) and RSI turns its head down. MA50 can’t even hold the fall last Friday. Now we’re looking for a support around 12200 level to maintain the stand ground for bulls. Bears are running the show now, especially major ERs are coming out next week. My own system gave out a sell signal on last Friday’s chart, the last buy signal was on Mar. 18th. I think I should have tuned my system to use CCI to point out a short entry in the future…

4 days in a row we have stars in the DOW chart. We got above of the neck line (green) on the day of Apr 1st, and stay above it for all 4 days after that. VOL is shrinking, hence I am thinking it’s a shrinking-VOL-flat-correction, a typical sign for a big bull market. It looks like market has no direction for 4 days, while shrinking VOL means less players on the table, normally when players are away from the table the whole market should go south slowly (remember the shrinking-VOL-slow-fall type bear market? players go away then the buying power is getting weaker, market head down.). Why DOW is not falling in these 4 days while VOL is falling? Players are leaving but buy power maintains? hmmm…. who is bidding on higher price even others folks are leaving? Giving out money for free? Having this kind of buying power, those guys can’t be fools, then why not pump up the whole market? Not the time yet, these bulls might be just collecting chips from those wishful thinking bears. Once they have enough chips, bulls just need to start the show, then bears will cry for the chips they left on the table earlier, of course, they will need to pay a much higher price.