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


Still a little bit of something for everyone available


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: (AMZN)
(Chart courtesy
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. (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
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
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.
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.

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.

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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