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Point & Go Figure: Midweek Market Review

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Short-term Overview:
The short-term is positive, but extended. Meanwhile, the percent of stocks above their 50-day moving average for the NYSE and Nasdaq are now both well into high-risk, high probability topping areas.

Percent of stocks above 50-day moving average - Nasdaq
(Chart courtesy Dorsey Wright)

While this indicator is now in a very high-risk area, it is the reversal down that indicates this present rally has likely run its course.

According to data from Investors Intelligence, the High-Low Index for the NYSE and the Nasdaq are also both well into a high-risk zone, but like the percent of stocks above their 50-day moving average indicators these two must show weakness before it is possible to conclude the present rally has run its course.

Intermediate Overview:
The intermediate picture continues to improve with the percent of stocks above their 150-day moving average for the NYSE and Nasdaq both positive (currently in Xs). However, it should be noted that, like the NYSE, these indicators are continuing to make lower highs dating back to their 2003 peaks.

Long-term Overview:
While the bullish percent charts for the NYSE and Nasdaq remain in Xs, the pattern of lower highs (meaning diminishing breadth and participation) combined with their relative high risk level, continues to suggest we are closer to a conclusion of the cyclical rally that began in October 2002 than to the beginning of an important new leg higher.

Charts of Interest:
Internet HOLDRs Trust (HHH)
(Chart courtesy Dorsey Wright)

Lockheed Martin Corporation (LMT)
(Chart courtesy Dorsey Wright)

Lockheed Martin Corporation (LMT)
(Chart courtesy Thomson Financial)

Intel Corporation (INTC)
(Chart courtesy Dorsey Wright)


Intel Corporation (INTC)
(Chart courtesy Thomson Financial)

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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