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Point & Go Figure: Amazon (AMZN), MCD, OSX

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Market Overview:
The NYSE Percent Above 50-day Moving Average Indicator reversed back to Os yesterday, forming a lower high since April, while the Nasdaq remains in Xs but is less than 2% away from reversing down to join the NYSE.

Meanwhile, the High-Low Indices for the NYSE and Nasdaq Composite both remain negative, in a column of Os.

The longer-term bullish percents for the NYSE and Nasdaq Composite are both still in Xs, but the larger pattern of lower highs there also remains intact, a significant bearish divergence, but a longer-term one. The more narrow S&P 500 and Nasdaq-100 Bullish Percents both are negative, each in a column of Os.

Charts of Interest:
Amazon.com (AMZN)
(Chart courtesy StockCharts.com)
AMZN on a PnF basis has formed a support level at 35.50 that remains intact despite negative headlines on earnings reported after the bell last night. A move to 34.50 would suggest a new leg down has increased in probabilities while 35 would simply be a bear trap.

Amazon.com (AMZN)
(Chart courtesy Thomson Financial)
Meanwhile, DeMark indicators show a TD-Sequential buy signal just registered. Trade potential combining the PnF and DeMark signal is 38.50, then 40.

McDonalds (MCD)
(Chart courtesy StockCharts.com)
Shares of MCD represent one of my favorite situations - a stock that has pulled back to near a couple of signficant PnF support levels while simultaneously...

McDonalds (MCD)
(Chart courtesy Thomson Financial)

registering a DeMark TD-Sequential buy signal.


PHLX Oil Service Sector (OSX)
(Chart courtesy
StockCharts.com)
The OSX looks great on a PnF basis. Why wouldn't it? It's near a new high. Unfortunately, relying only on a PnF chart (while the market again ratchets up the decibels in its renewed mania for Oil Service stocks), would leave one vulnerable to a decline of 17% before a sell signal registers. That's a lot of downside risk.

PHLX Oil Service Sector (OSX)
(Chart courtesy Thomson Financial)
Meanwhile, although the PnF chart is fine, the DeMark indicators are lining up to suggest a high probability of risk has entered this index. DeMArk sell signals have registered, or are close to registering, on multiple time frames.
Daily
The daily chart shows a TD-Combo sell signal registering as of this morning, though it depends on how the index behaves during this bar throughout the remainder of the day to confirm it.

Weekly
A DeMark TD-Sequential sell signal remains active on a weekly chart. Prior 13 sell signals since last summer have produced trend interruptions while moves through the risk level lines have signalled a renewed trend higher.

Monthly
A monthly sell signal could occur next month and the bar it will be measured against (February's) sets the probabilities fairly high it will be.

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