Even if prices appear to be clawing their way through the overhead supply at around Dow 8,000 and S&P 500 825 to 875, the going is getting tougher.

The highest that the S&P has achieved so far was the high of Thursday, April 2, at 846, before it was turned aside on a minor reversal this Tuesday. Volume has been on the low side on both advances and declines, but this week that was no doubt due to the impending holiday weekend.

Continue reading Today's technical outlook: Can Nasdaq break away and reverse?

Today's technical outlook: Can Nasdaq break away and reverse? originally appeared on BloggingStocks on Thu, 09 Apr 2009 09:30:00 EST. Please see our terms for use of feeds.

As the three-day Easter weekend approaches, volume is declining as both traders and investors shy away from a market that is fraught with uncertainty.

Not only are the Q1 earnings in doubt, but longer-term economic analysis by the ChangeWave team indicates that we can expect to see a trading range of 700 to 900 on the S&P 500 for at least several months. And this is supported by my own technical analysis.

After a discussion of many of the risks peculiar to this economic cycle, the ChangeWave team appraises the big economic forces that "simply have to play out over time."

Continue reading Today's technical outlook: Back out of the banks

Today's technical outlook: Back out of the banks originally appeared on BloggingStocks on Wed, 08 Apr 2009 09:30:00 EST. Please see our terms for use of feeds.

Monday was a day of crosscurrents and even though late buying recovered some of the earlier losses, it was the first loss in five days -- leaving the bulls wondering if the buying had reached its apex.

The Dow dropped below 8,000 yesterday, but that might not be as significant as the overdone internal indicators on all of the major indices. These indicators tell us when markets are overbought or oversold based on historically relevant studies.

Continue reading Today's technical outlook: Market top could have bulls scrambling

Today's technical outlook: Market top could have bulls scrambling originally appeared on BloggingStocks on Tue, 07 Apr 2009 09:30:00 EST. Please see our terms for use of feeds.

With the best four-week performance since 1938 behind us, with the markets up more than 23%, many analysts are wondering whether that sort of performance can be maintained.

This weekend, Drew Kanaly of Kanaly Trust said he was "highly skeptical" that the rally could run any more than a couple more weeks, and attributed it to extreme oversold readings following Treasury Secretary Tim Geithner's "ill-received speech of Feb. 10."

And Mark Arbeter of Standard & Poor's agreed with him. But Mark is still looking for the S&P 500 to run to "875 to 890 before a major correction sets in."

Continue reading Today's technical outlook: How far will the rally run?

Today's technical outlook: How far will the rally run? originally appeared on BloggingStocks on Mon, 06 Apr 2009 09:30:00 EST. Please see our terms for use of feeds.

Even though Friday's and Monday's selling moderated some of the overbought internal indicators, those indicators -- chiefly the Moving Average Convergence/Divergence (MACD) and Stochastic -- are still very overbought, and momentum has fallen to the point where it will take some hefty volume to make a meaningful turn up again.

And speaking of volume: Just when the bulls need a big chunk of buying to penetrate into the massive overhead beginning at S&P 500 820, volume contracted yesterday to just 1.5 billion shares traded on the NYSE.

Continue reading Today's technical outlook: Market remains in bear country

Today's technical outlook: Market remains in bear country originally appeared on BloggingStocks on Thu, 02 Apr 2009 09:30:00 EST. Please see our terms for use of feeds.

Yesterday was the last day of the quarter and, as usual, institutions were positioning some stocks that already had gains, a practice that Wall Street calls "prettying up portfolios."

But the last 45 minutes of trading may have revealed the true trend, as sellers drove the Dow down more than 115 points on the highest volume of the day.

The good news was that the major indices managed to hold above their respective 20-day moving average lines. But the S&P 500 failed to hold the 800 level, and many technicians felt that it was necessary to stay above that "psychological number" if the rally was to continue.

Continue reading Today's technical outlook: A sell-off is in the works

Today's technical outlook: A sell-off is in the works originally appeared on BloggingStocks on Wed, 01 Apr 2009 09:30:00 EST. Please see our terms for use of feeds.

Monday's sell-off was caused by the forced resignation of General Motors' (NYSE: GM) chief, and the threat that both GM and Chrysler would face bankruptcy.

This classic example of a news-triggered correction, or perhaps even a confirmation of the bear market, came just as stocks were broadly overpriced.

In addition to a sell signal from most of the internal indicators (most graphic being the stochastic), the close below the psychologically important 800 number on the S&P 500 and the Dow's failure to surmount 8,000 sent a clear signal that prices are headed lower.

Continue reading Today's technical outlook: Expect more downside

Today's technical outlook: Expect more downside originally appeared on BloggingStocks on Tue, 31 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

Most technicians agree that the rally from the January lows is now overextended, and whether you are basing the resistance on Fibonacci numbers at S&P 500 833 or 838, or various support and resistance lines at 836 to 850, or internal indicators, you would have to be an overenthusiastic bull to take many new positions now.

Even though the downside volume shrank to just 1.4 billion shares on Friday on the Big Board, there is other evidence to suggest that the current rally has already topped or is about to.

Continue reading Today's technical outlook: Time to short the Dow

Today's technical outlook: Time to short the Dow originally appeared on BloggingStocks on Mon, 30 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

The S&P 500 is up almost 25% from its March 6 low, and is knocking on the door of the widest and deepest resistance zone in the bear market at S&P 820 to 920.

Yesterday, we discussed the analysis done by Mark Arbeter of Standard & Poor's. Mark concluded that the market is due for a pause and then a "decent advance" before we see another correction.

He ended his report with, "We would use any strength in the stock market to lighten up and then wait for the next bottom to develop before adding to positions."

His analysis is impressive, but this market doesn't read the newspapers. And bullish behavior like that of the past 11 days begets more bullish behavior.

Continue reading Today's technical outlook: Bear, it's what's for dinner

Today's technical outlook: Bear, it's what's for dinner originally appeared on BloggingStocks on Fri, 27 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

Despite yesterday's closing rally, the overall chart pattern remains unchanged, with all of our most-watched internal indicators overbought and most of the sentiment indicators showing more complacency with the public now becoming very bullish.

So with the market's internals now at their weakest, the bulls are attempting an attack on the most formidable overhead of the entire bear market.

Continue reading Today's technical outlook: Strong sell-off likely

Today's technical outlook: Strong sell-off likely originally appeared on BloggingStocks on Thu, 26 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

If Monday's huge rally seemed overdone, the market agreed with you yesterday. Profit-taking dominated the day, along with questions regarding the practicality of the Treasury's new plan to revive the financial system and the huge deficits dominated the news.

Stocks were down for most of the session but the market fell almost 100 points in the last half hour of trading, led by the banks and other financials.

At the close, the Dow was down 116 points to 7,660, the S&P 500 fell 17 points to 806 and the Nasdaq was off 39 points, closing at 1,516.

Continue reading Today's technical outlook: Bears are still hungry

Today's technical outlook: Bears are still hungry originally appeared on BloggingStocks on Wed, 25 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

Wednesday's announcement that the Fed would buy into the U.S. Treasury bond market was no surprise to most Fed watchers. In fact, the Fed has been talking about it for weeks.

But the big surprise was the size of the buybacks and the impact on future inflation.

So, with a newly revived concern about inflation, and five days of gains out of seven under their belts, traders decided it was time to cash in some chips.

But, technically, there is much more to the market's reaction to Wednesday's Fed move.

Continue reading Today's technical outlook: Indices following the financials

Today's technical outlook: Indices following the financials originally appeared on BloggingStocks on Mon, 23 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

On March 6, just 11 trading sessions ago, the S&P 500 hit a low of 666.71. Since then, six of nine sessions have been up and the index has risen more than 20%.

The SPX has penetrated the 20-day moving average and the first island of resistance at 742 to 780, and yesterday when hitting 803.24, it entered the first serious zone of overhead at 800 to 820.

But technically, and as a result of the huge percentage gain, virtually every internal indicator is now overbought.

Continue reading Today's technical outlook: Market due for sell-off

Today's technical outlook: Market due for sell-off originally appeared on BloggingStocks on Fri, 20 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

I confess to being surprised by the extent of the current rally, even after many times warning that bear-market rallies tend to be sudden, violent affairs.

Nevertheless, the facts point to the dramatic advance of the past 10 days (the best seven-day rally since 1939) as still nothing more than a rebound following a sell-off that took prices to a level that had to be attacked by bargain hunters and patient investors alike.

Now, however, the easy part is behind them.

Continue reading Today's technical outlook: Too late to buy stocks

Today's technical outlook: Too late to buy stocks originally appeared on BloggingStocks on Thu, 19 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

With a stock market advance in six of the past eight sessions, the bulls are now feeling in complete control. And it is no wonder that many are calling the low of early March the end of the bear market.

The Dow Industrials are up 14.79% from the March 6 low. The S&P 500 has gained 16.64%, and the Nasdaq has gained 15.48%.

But as the indices rise to the top of the first overhead barrier, volume is declining on days when the market advances.

Continue reading Today's technical outlook: Has the rally run its course?

Today's technical outlook: Has the rally run its course? originally appeared on BloggingStocks on Wed, 18 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

Monday, the stock market stumbled, breaking a four-day winning streak at the first shallow resistance zone bounded by S&P 500 742 to 780. Yesterday's high for the index was 774.53.

It is clear that the reversal for the S&P resulted from afternoon profit-taking, so the index could spring back as early as today.

More ominous, however, was the Nasdaq's tape action.

Continue reading Today's technical outlook: Traders should stand aside

Today's technical outlook: Traders should stand aside originally appeared on BloggingStocks on Tue, 17 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

On Thursday, the S&P 500 closed above the 20-day moving average at 745.10 for the first time since Feb. 9. And it closed above the resistance line drawn from the November low at 741.02 for the first time since Feb. 13.

Volume for each of the days of higher prices increased to more than 1.8 billion shares on the NYSE, and that is a higher-than-average volume for any month this year (1.6 billion average). But volume has been picking up since the breakdown on Feb. 27, at S&P 500 740, when more than 2 billion shares traded.

With a reflex rally now under way, the question is: How far can it go?

Continue reading Today's technical outlook: Enjoy the rally while it lasts

Today's technical outlook: Enjoy the rally while it lasts originally appeared on BloggingStocks on Mon, 16 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

Tuesday's 6.4% rally on the S&P 500 was the best single day in almost four months. And an internal indicator, the NYSE A/D ratio, registered its highest number since Oct. 13, at 12.75.

Also, volume was above the average volume of the past three months and was more than 40% over Monday's volume on the NYSE.

Most analysts attributed the rally not only to very oversold readings, but primarily to the announcement of profits by Citigroup (NYSE: C) for both January and February.

But if that's the case, why then didn't the market follow through yesterday afternoon when JPMorgan Chase (NYSE: JPM) said that it too scored profits in those months?

Continue reading Today's technical outlook: Rally already fizzling

Today's technical outlook: Rally already fizzling originally appeared on BloggingStocks on Thu, 12 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

Today, I want to examine what others are thinking about this market.

I read Peter Brimelow's refreshing column, and on Monday he summarized the prognostications of some of the popular letter writers:

"Astrology oriented Crawford Perspectives ... up 50.75% last year, said, 'There are evidences that our whole system is melting down, and that could certainly disturb the normal cyclic flow. We believe that will NOT happen All At Once or Right Now! Even a drowning man gets a last breath or two before going down for the count.'"

Continue reading Today's technical outlook: Bear market rally could end as quickly as it started

Today's technical outlook: Bear market rally could end as quickly as it started originally appeared on BloggingStocks on Wed, 11 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

Just one day after hitting new lows, the major averages reversed course for the strongest day in a month.

The rally was touted as a response to Chairman Bernanke's testimony and the anticipation of the president's speech. But technical analysis has been telling us that the markets have been due for a rally.

I pointed out in yesterday's Daily Market Outlook, that the market was so extremely oversold that a rally was overdue, despite new lows in the Dow, which confirmed that the bear market was still with us.

Continue reading Today's technical outlook: Market got its due

Today's technical outlook: Market got its due originally appeared on BloggingStocks on Wed, 25 Feb 2009 09:30:00 EST. Please see our terms for use of feeds.