Weekly Signals

[Abby Justa Colon]

The Sox are still not leading this rally. They were actually down for the week. 

Looks like it will make a move out of this pattern soon. Question is....up or down?

We shall keep an eye on it as it may be the telling piece of the puzzle.

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Same old....still down for the week as the markets push higher.

Are they leading?? Will the markets follow??

Kind of has that feel to it right now.

Sox are still showing that H&S pattern.

[Abby Justa Colon]

Note the ST MACD has stalled out here and the Sto looks to be rolling over.

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Wild ride on OPEX week! Looks like it did indeed wanted to roll over and it did in grand fashion on Friday.

NDX down 2.15% for the week.

C_NBC dusted off AJC and she claimed it was now time to buy stocks as they are cheap. She also said there would not be a recession in the U.S. any time soon. The Dow was at 13,970 when she made that statement on Wednesday so we are pegging it at that point for the AJC market call....we will mark her progress.

 

We came out in fine shape as we were fence sitting (no position) while waiting for our next entry. Thats probably just as well with OPEX week volatility.

 

Weekly Update:

Sto rolling over, LT MACD histo retreating sightly. ST MACD signal line looks to want to cross soon. Histo dropped in half. The all important 26 week ma still pointing up for long trades only.

[Abby Justa Colon]

The daily is showing a nice channel going back to the end of August. It is a very narrow channel with a steep angle. As long as prices stay in the channel the trend is safe. How long it can maintain its present course is uncertain, but at some point it will break through and I don't believe it will be to the upside. 

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With Fridays plunge we got our channel break. CMO 12-day sliding all week, but still above the 0 line. The 3-day hit a lower high during the week to set up a nice divergence for Friday's drop. Note: even with Friday's sell-off, the 3-day still did not make it below -50. Now we are looking at another divergence with prices making a lower low, but the CMO not responding. Volume picked up nicely...even for OPEX.

As posted above we were sitting in cash waiting for the next buying opportunity which may take shape next week as we would like to see the gap fill from Oct. 4th play out in the 51.80 area.

[Abby Justa Colon]

Are they leading?? Will the markets follow??

Kind of has that feel to it right now.

Sox are still showing that H&S pattern.

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Looks like they were leading...still the H&S looks to want to play out....Sox lost the ma 's this past week.

[Abby Justa Colon]

Wild ride on OPEX week! Looks like it did indeed wanted to roll over and it did in grand fashion on Friday.

NDX down 2.15% for the week.

 

The weekly charts are acting just like the dailies. Down one week, up the next.

 

The index gained 2.98% for the week. It gained back what it lost the week before and then some. On the surface, that would seem like all is good...the old one step backward and two steps forward thing, but if we look at the weekly chart it kind of distorts that view.

Notice how the Sto and ST MACD signal lines have fallen from their previous high marks? As the index regained its strength in price, the indicators have lost their momentum.

 

This does not bode well for the longer term. The all important 26 week ema is still pointing up, so we will stay the course until the charts say otherwise.

[Abby Justa Colon]

Daily Chart...

Both the CMO indicators can't seem to break upward. With such a strong week, that would seem almost a slam dunk for it to happen. The same thing that is happening on the weekly charts: the indicators are failing to make higher highs as prices chug ahead. This tells us that there are fundamental problems under the surface.

Note on Friday prices tagged the highs of the month, but the CMO 3-day went negative.

The CMO 12-day actually went negative on Thursday, but recovered. That was the first time since late August that it went negative.

Volume is creeping up on the down days....not a healthy sign.

We will have to watch this closely...still playing from the long side until we get a confirmation of a change in trend....if that is to be.

[Abby Justa Colon]

Are they leading?? Will the markets follow??

Kind of has that feel to it right now.

Sox are still showing that H&S pattern.

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Looks like they were leading...still the H&S looks to want to play out....Sox lost the ma 's this past week.

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The SOX confirmed the brake this past week in a big way. Looks to project to the 425ish area. Short term it looks a tad bit over-sold on the RSI scale, but it could go down further before a bounce.

[Abby Justa Colon]

Notice how the Sto and ST MACD signal lines have fallen from their previous high marks? As the index regained its strength in price, the indicators have lost their momentum.

 

This does not bode well for the longer term. The all important 26 week ema is still pointing up, so we will stay the course until the charts say otherwise.

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Up a tad on another roller coaster week.

The Sto still looks to be rolling over. The LT MACD turned up a bit as the ST MACD slightly declined. The ST MACD histogram is still showing that divergence. As it has the past few months, the all important 26 week ema still pointing up.

Its still says to trade from the long side for now.

[Abby Justa Colon]

On the daily....

We finally got a little movement in the 3-day CMO. It tagged the +100 mark before pulling back on Thursday.

Note the divergence in the 12-day. Basically, the longer the term you go out in the indicators (in this case from a 3-day to 12-day for example) the more important that indicator becomes for swing trades. We will need to keep an eye on this one to see if it can catch up with price.

Although these one day sell-offs seem big, they haven't been able to get the CMO 3-day back below the -50 mark. The pullbacks are shallow and two down days in a row are becoming rare. In the long run this is not sustainable...not a normal market for sure....but when is it ever.

[Abby Justa Colon]

Slight bounce on the SOX....still looking for a possible target of 425ish.

[Abby Justa Colon]

The Sto still looks to be rolling over. The LT MACD turned up a bit as the ST MACD slightly declined. The ST MACD histogram is still showing that divergence.  As it has the past few months, the all important 26 week ema still pointing up.

Its still says to trade from the long side for now.

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Well that was an exciting week to say the least! Index down a whopping 8.11%!

 

Finally saw some changes in the weekly charts.

 

The Sto broke through the 80 line heading for the b-ull/bear line of 50.

The LT MACD is looking for a signal crossover with the histo slipping.

The ST MACD had its signal line crossover while the histo went into the red.

The all important 26 week ema went flat for the first time since August.

 

The Index is showing signs of turning to the bear side...since the 26 week is essentially flat, now is not the time to be getting aggressive on either the b-ull or bear side. We will have to see what the market gives us next week. A turn up in the 26 week, and we will go b-ullish, a turn down and its time to position shorts.

 

As we stated weeks ago, it sure looked like a top was being put in....but it looked that way in August too, so we just have to wait and see.

[Abby Justa Colon]

Note the divergence in the 12-day. Basically, the longer the term you go out in the indicators (in this case from a 3-day to 12-day for example) the more important that indicator becomes for swing trades.

The pullbacks are shallow and two down days in a row are becoming  rare. In the long run this is not sustainable.

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Note: I had to use a different chart service for the daily chart. Doc's chart provider is dead again.

On the daily chart, those divergences we were watching finally got some price action.

Note the 12-day CMO broke through the "0" line. Volume increased significantly on the down moves.

I added a 22 day ema...its one I use to help determine the trend. It turned down this past week.

Similar to the weekly chart, the daily isn't showing complete bear signals, but it is getting very close to on some. One is the 11/34 ma crossover, it didn't happen yet..but looks to be just a matter of time before it does. This week should clear things up.

On the trading side...a weak buy signal was generated when the CMO hit -50 and bounced on Tuesday, gains were quickly erased when a stop just below the previous days low was taken out on Wednesday. That was a good exit point as the index free fell the next two days.

 

Remember we are looking for swing trades here in the direction of the main trend (which is unclear now)...not day trading looking for exact tops or bottoms and trying to catch every move. That strategy is near impossible unless you can watch every tick by tick...even then its hard to be right more than 60% of the time.

 

So now the CMO 3-day is pegged at -100. It can only generate a buy signal if it can penetrate the -50 line again...but it will need the weekly ema needs to confirm with an up bias (not likely, but possible). Otherwise we will start looking for short plays on any strength.

With OPEX this Friday..it should be another interesting week.

[Abby Justa Colon]

Are they leading?? Will the markets follow??

Kind of has that feel to it right now.

Sox are still showing that H&S pattern.

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Yep, the Sox did telegraph the market down moves of last week well in advance. As they say the Semis and the Banks lead the way...

The H&S pattern still has some ways to go to play out...about another 20 pts or so.

[Abby Justa Colon]

 

The Sto broke through the 80 line heading for the b-ull/bear line of 50.

The LT MACD is looking for a signal crossover with the histo slipping.

The ST MACD had its signal line crossover while the histo went into the red.

The all important 26 week ema went flat for the first time since August.

 

The Index is showing signs of turning to the bear side...since the 26 week is essentially flat, now is not the time to be getting aggressive on either the b-ull or bear side. We will have to see what the market gives us next week. A turn up in the 26 week,  and we will go b-ullish, a turn down and its time to position shorts.

 

If you just look at the weekly, and didn't pay attention to the daily stuff, it looked just like any other boring no action market week.

Of course this week had the mega-roller coaster ride again, but in the end the index managed to squeak out a gain.

 

On the weekly....

 

The Sto just tagged our b-ull/bear line of 50, but didn't manage to break trough.

The LT MACD just had a signal line crossover as the histo peeked below the 0 line.

The ST MACD signal line crossed below the 0 line.

The all important 26 week ema ended the week ever so slightly up (I put a strait line under it just to see how little it is up). The ema was actually down early in the week, but we use the Friday close as our proxy.

 

We are still in no mans land with no concrete direction. Most indicators are pointing to the bearish side, but until we get confirmation from all (we are basically waiting on the 26 week ema) then we shall stay neutral.

[Abby Justa Colon]

With OPEX this Friday..it should be another interesting week. 

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Interesting week to say the least.

The 12-day is running deeper in the red. Note the 3-day in the past was able to rally up and touch the 100 line with ease, now its having trouble just getting to the 50 line. If the bear is back (we will wait for confirmation, see above) then we need it to at least tag the 50 for decent short entries.

The 11/34 cross is in full swing, so no long plays now.

Volume has slacked off a tad, but still way ahead of the past several months.