Point & Go Figure: Midweek Market Review
The percent of stocks above their 50-day moving average charts remain in Os (defensive posture) and, despite yesterday's move higher, are not close to reversals back to Xs. Moreover, they remain closer to overbought levels (70% and above) than oversold levels (30% and below).
The High-Low indicators remain defensive as well. The NYSE and Nasdaq High-Low charts were both up yesterday, according to data from Investor's Intelligence, though nowhere close to a reversal to Xs.
The intermediate picture remains slightly mixed with the percent of stocks above their 150-day moving average for the NYSE negative (and continuing to make lower highs) while the Nasdaq remains positive (currently in Xs). It should be noted that, like the NYSE, this indicator too is continuing to make lower highs dating back to its ultimate peak in September 2003.
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 to the cyclical rally that began in October 2002, than to the beginning of an important new leg higher.
Positive technical action continues to take place in the Chemicals sector. Of special interest to me is the potential for a paired trade with Dow Chemical (DOW) (beta 1.08) as the technically weak side and possibly Chemtura Corporation (CEM) (beta 1.34) on the technically strong side.
Dow Chemical (DOW)
Chemtura Corporation (CEM)
Charts of Interest:
Arena Resources (ARD)
Grant Prideco (GRP)
Alkermes Incorporated (ALKS)
Dow Jones Industrial Average
If you would like a chart reviewed, let me know here.
I have added text and illustrations to the charts where necessary.
Charts courtesy Dorsey, Wright & Associates.
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.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter