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Point & Go Figure: AMD, GS


Still not out of the woods?!


Market Overview:

The short-term conditions continue to break down and deteriorate from high-risk levels. The Percent Above 50-day Moving Average Indicators for the NYSE did reverse back up to a column of Xs yesterday, but as the chart below shows, so far that reversal to Xs simply continues the pattern of lower lows and lower highs that has been intact from the first of the year, and more importantly takes this indicator back toward higher risk levels.

NYSE Percent Above 50-day Moving Average
(Chart courtesy Dorsey Wright)

The Nasdaq Composite Percent Above 50-day Moving Average Indicator remains negative, having formed yet another lower high and exceeded a previous bottom.

The High-Low Index for the Nasdaq Composite and the NYSE are both negative. Moreover, the Nasdaq Composite High-Low has exceeded a previous bottom while the NYSE High-Low is within 1.2% of exceeding a previous bottom.

Meanwhile, the longer-term bullish percent Indices for the NYSE and Nasdaq Composite are both still in Xs, but the larger pattern of lower highs remains intact. The more narrow Nasdaq-100 Bullish Percent is negative.

Charts of Interest:
Advanced Micro Devices (AMD)
(Chart courtesy
On March 9 we noted that AMD had formed a bullish shakeout pattern with the double bottom break at 38 but that DeMark TD-Sequential and TD-Combo readings were not yet suggesting a price completion to the downside had occurred.

As noted then, I prefer to see at least a potential buy setup (9) and count subsequent progressing toward price completion (13) before pursuing shakeout patterns. Since then, the stock has added two more Os to the downside and is now sitting on spread double bottom support at 34 on the chart. A move to 33 could usher in a new wave of downside pressure, especially with still no valid DeMark TD-Sequential or TD-Combo buy setups yet in place.

Goldman Sachs (GS)
(Chart courtesy Thomson Financial)
GS gapped up on earnings, but into a 13 TD-Sequential upside price completion. The stock last registered a 13 in November, which produced an extended period of sideways to lower movement before a breakout in late January. The January breakout was also confirmed by a PnF breakout at 130 following a pullback to long-term PnF trendline support. Note: a 13 does not mean a permanent trend reversal is taking place, but it does raise the probabilities that GS is exhausted for now.

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No positions in stocks mentioned.

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