Sunday, September 21, 2008

Major indices posted the biggest gains since 2002

The Stock Market Week - 9/19/2008

In our previous publication on September 5th we suggested that "the S&P 500 is now in sub wave three of the third down wave. This sub wave is considered the worse in the five-wave structure". The recent financial events appear to be the worse in the history of US financial market so far. "America's economy is facing unprecedented challenges," president Bush declared in a press conference Friday. The crisis has forced 12 federally insured banks and thrifts into failure this year. Another 117 banks and thrifts were considered to be in trouble in the second quarter with the total assets of troubled banks tripling to $78 billion, according to the Federal Deposit Insurance Corp.

On Monday September 15 week the Dow Jones Industrial Average lost 4.42%, this is the biggest loss since July 19, 2002 when Dow lost 4.6%. The Standard & Poor's 500 Index and Nasdaq Composite lost on Monday 4.71% and 4.94%; these are biggest losses since September 17, 2001 when they lost 4.92% and 6.83%.

For the first tree days of last week the Dow Jones Industrial Average lost 7.11% while Standard & Poor's 500 Index and Nasdaq Composite lost 7.61% and 7.18%. These were the biggest losses since August 5, 2002 when major indices lost 7.93%, 8.45%, and 9.20% in three consecutive trading sessions.

For the last two days of the week the Dow Jones Industrial Average gained 7.34% while Standard & Poor's 500 Index and Nasdaq Composite gained 8.53 % and 8.34 %. It was the biggest gain since October 11, 2002 when Dow Jones gained 7.74% while Nasdaq Composite gained 8.65%% in two consecutive trading sessions.

For the week the Dow Jones Industrial Average gave back 33.55 points, or 0.29%. The Standard & Poor's 500 Index climbed 3.38 points, or 0.27%, while the Nasdaq Composite climbed 12.63 points, or 0.56%.

After the government intervention, the Financial sector was the strongest sector last week followed by the Energy sector. The Basic Materials and Technology are the most oversold sectors while Processing Systems/Prods, Semiconductor - Memory Chips, and Semiconductor-Intgrtd Circ are among the most oversold industries.

Dow Jones Industrial Average Trend Analysis
Dow Jones Industrial Average long-term chart has formed a head and shoulders pattern. The price retested the neckline and has resumed the long-term downtrend. The pattern should be close to completion, but the price did not reach the target yet. The price drop did not move weekly technical indicators into oversold area as usually happens at the end of the long-term downtrend.
Dow Jones Industrial Average - Long-Term Trend
Technical Stock Market Timing System
Standard Poor's 500 Index Trend Analysis
Standard & Poor's 500 Index is in a long-term down trend that started on 10/11/2007 at 1576.09. The chart is forming a falling channel pattern. The support line is around 1190, and the resistance line is near 1360. The third wave down is in progress now. It has started on 5/19/2008 and now it is forming the sub wave three down as well. According to this wave count, the S&P 500 is now in sub wave three of the third down wave. This sub wave is considered the worse in the five-wave structure. Both weekly and daily technical indicators are neutral. The downtrend is not completed yet. The price may spend some time in indecision area after the government intervention, but then the long-term downtrend may resume soon.
Standard Poor's 500 - Long-Term Trend
Technical Stock Market Timing System
Nasdaq Composite Index Trend Analysis
The Nasdaq Composite index is in a long-term uptrend since 2002. As we suggested previously, the price is forming a symmetric triangle chart pattern. A triangle pattern usually represents an area of indecision, where the direction of the movement is questioned. In a mature trend a triangle chart pattern usually appears as a reversal formation. Last week the triangle pattern had a breakdown with noticeable increase in volume. The price target is below 2000.
Nasdaq Composite Index - Long-Term Trend
Technical Stock Market Timing System
Presented by www.thegreedytrader.com Research Group.

Sunday, September 07, 2008

Dow Jones - head and shoulders pattern

The Stock Market Week - 9/5/2008

All the major US indices were negative. For the week the Dow Jones Industrial Average dropped 322.59 points, or 2.79%. The Standard Poor's 500 Index dropped 40.52 points, or 3.16%, while the Nasdaq Composite dropped 111.64 points, or 4.72%.

The Financial sector was the strongest sector last week followed by the Consumer Staples sector. The Energy sector was the worst performing sector of the week followed by the Materials sector.

Dow Jones Industrial Average Trend Analysis
Dow Jones Industrial Average long-term chart has formed a head and shoulders pattern. As we suggested in our earlier publications, the Dow Jones has retested the neckline. The short-term rally has reached 11,933.55 on August 11. This level was close to the Fibonacci 50% retracement level. Since August 11 the Dow Jones has resumed the long-term downtrend.
Dow Jones Industrial Average - Long-Term Trend
Technical Stock Market Timing System
The short-term chart is forming a sharp falling channel. Both weekly and daily Williams' % Range (W%R) indicators are oversold while other technical indicators are neutral. Oversold W%R usually indicates that the recent chart slope is too steep and might not be sustainable.
Dow Jones Industrial Average - Short-Term Trend
Technical Stock Market Timing System
Standard Poor's 500 Index Trend Analysis
Standard & Poor's 500 Index is in a long-term down trend that started on 10/11/2007 at 1576.09. The chart is forming a falling channel pattern. The support line is around 1190, and the resistance line is near 1360. The third wave down is in progress now. It has started on 5/19/2008 and now it is forming the sub wave three down as well. According to this wave count, the S&P 500 is now in sub wave three of the third down wave. This sub wave is considered the worse in the five-wave structure. Both weekly and daily Williams' % Range (W%R) indicators are oversold while other technical indicators are neutral.
Standard Poor's 500 - Long-Term Trend
Technical Stock Market Timing System
Nasdaq Composite Index Trend Analysis
The Nasdaq Composite index is in a long-term uptrend since 2002. As we suggested previously, the price is forming a triangle chart pattern. A triangle pattern usually represents an area of indecision, where the direction of the movement is questioned. In a mature trend a triangle chart pattern usually appears as a reversal formation. Daily technical indicators are overbought.For several months the Nasdaq Composite index has been the strongest among the major US stock market indices. Last week Nasdaq dropped 4.72%, and was the weakest. The daily Williams#39; % Range is strongly oversold, while daily Lane#39;s Stochastic and weekly Williams#39; % Range is oversold. Price is near a long-term trend support.
Nasdaq Composite Index - Long-Term Trend
Technical Stock Market Timing System
Presented by www.thegreedytrader.com Research Group.