BigTrends.com
Weekly Market Outlook
November 29, 2003
NASDAQ COMMENTARY
The shortened week was at least a strong one, as the Nasdaq recouped losses from the
prior week, and charts gave us some new buy signals. Almost like clockwork, the
composite hit the lower side of its channel (dashed lines) and bounced higher - a
pattern we've seen several times in recent months. We also crossed back above the 10
day EMA line (red) in a big way Monday, and found support there after touching it
with Wednesday's low. And from Friday's close of 1959.61, we still have a little more
room to go before hitting the top edge of our channel; the resistance line is
currently at 2065, and rising. And once again, we saw the Chaikin line cross above
zero, so we know that we have enough volume behind this move to keep it going for a
while.
And we even got a bullish MACD crossover, but the MACD lines are the thorn in our
side. True, it's bullish (at least in the short-run) that we're getting a bullish
momentum divergence, but look at the overall pattern of the MACD lines. Each recent
peak was lower than the previous one, and the most recent dip actually touched on the
zero line. The implication is that stocks are having a harder time moving higher, but
not having much of a problem moving lower. So before we become all-out bullish, we'll
want to see the MACD line move at least above the peak level of 24.35 from two weeks
ago.
Yet the momentum remains bullish, while most technical indicators are in agreement.
NASDAQ CHART
S&P 500 COMMENTARY
The S&P 500 chart is even more bullish than the Nasdaq's, in that it's closer to
hitting new 52-week highs. The S&P closed at 1058.20, just 0.5% below high of 1063.65
from two weeks ago. Getting above there would put the index back at twelve month
highs, and draw even more buyers into the market. And there shouldn't be any major
problems at least getting there, as the upper Bollinger band (a potential resistance
level) as already at 1066, and the upper resistance line (dashed) is at 1073 and
rising.
But the accumulation-distribution line in the middle of our chart tells the complete
story. The rising line tells us that there is more accumulation (buying) than
distribution (selling), and as long as investors are buying, they're also driving
stock prices up. You will see the dips in this line that correspond with the dips in
the index, but like the index, the accumulation-distribution line has a support line
of its own. In fact, that support line was the reason for our concern last week. The
A-D lines were threatening to cross under support, but none of them ever did.
Instead, they bounced off those lines in the same manner that the indices bounced off
of their support lines. Like the Nasdaq's Chaikin line, the S&P 500's rising
accumulation-distribution line tells us that there is enough volume behind this move
to sustain it.
We are seeing something worth noting in our Directional Movement Index (DMI) lines in
the lowest portion of our chart. While we technically did get a bullish DMI crossover
a few days ago, the strength of the trend has been minimal. Take a look at the gray
ADX line, and how low it is. The low level indicates that the difference between DMI+
and DMI- is small, which in turn means that we're not making any major, lasting
bullish moves. Bottom line, the trend is still bullish, but it's not fiercely
bullish. We'd need to see an ADX level around 25 before calling any trend a 'strong'
trend.
S&P 500 CHART
Se não receio o erro é porque estou sempre pronto a corrigi-lo
There's no bull side and no bear side. JUST THE RIGHT SIDE!
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