Weekend Fly-by

Feb 24, 2008: 8:05 PM CST

Let’s take a quick look at the weekly charts of key stocks or indexes to see what could happen in the weeks ahead.

First, the Dow Jones:

  • New Momentum Low (blue dotted arrow) hints that lower index prices are yet to come.
  • Non-confirmation by volume (blue solid arrow) hints that the recent higher price swing was not confirmed by increased participation
  • Triangle consolidation (purple lines) reveal market consolidation, confirmed by reduced volume as the pattern formed, which hints at a large volatility move that’s upcoming
  • The index is in a downtrend, and the 20 period average has now crossed under the 50 period average (‘death cross’)
  • The technical (chart) structure hints at lower prices ahead

The US Dollar Index:

  • Confirmed and strong downtrend
  • Moving averages in most bearish orientation possible
  • Price cannot seem to breach the falling 20 period moving average

Apple Inc (AAPL):

  • Rising wedge completion, resulting in a large volatility move down
  • Momentum divergence accompanied the rising (bearish) wedge
  • New momentum low has formed, but on euphoric volume conditions
  • Volume has been receding as price has moved lower, serving as a non-confirmation of lower prices
  • Price has broken both the 20 and 50 period moving averages

The week ahead should resolve the triangle on the US Stock Market Indexes, so be aware that a large volatility price move may come at any moment next week, and don’t get taken by surprise if it happens.

5 Comments

5 Responses to “Weekend Fly-by”

  1. Apple » Weekend Fly-by Says:

    […] Afraid to Trade.com Blog – Overcoming Fears wrote an interesting post today on Weekend Fly-byHere’s a quick excerpt Let’s take a quick look at the weekly charts of key stocks or indexes to see what could happen in the weeks ahead. First, the Dow Jones: New Momentum Low (blue dotted arrow) hints that lower index prices are yet to come. Non-confirmation by volume (blue solid arrow) hints that the recent higher price swing was not confirmed by increased participation Triangle consolidation (purple lines) reveal market consolidation, confirmed by reduced volume as the pattern formed, which hints at a l […]

  2. Stock Market » Weekend Fly-by Says:

    […] Afraid to Trade.com Blog – Overcoming Fears wrote an interesting post today on Weekend Fly-byHere’s a quick excerpt Let’s take a quick look at the weekly charts of key stocks or indexes to see what could happen in the weeks ahead. First, the Dow Jones: New Momentum Low (blue dotted arrow) hints that lower index prices are yet to come. Non-confirmation by volume (blue solid arrow) hints that the recent higher price swing was not confirmed by increased participation Triangle consolidation (purple lines) reveal market consolidation, confirmed by reduced volume as the pattern formed, which hints at a l […]

  3. Weekend links | Stock Picks and Discussion at iBankCoin.com Says:

    […] Weekend Fly-by […]

  4. Tom Says:

    Dear Corey:

    I understand your position on the US Dollar and agree with your chart analysis and would assume you would be bullish USO as a result. However everyone is bearish the Dollar to the extreme and I am having trouble making conclusions re the chart of USO. To me it may be topping for a substantial fall from a possible triple top. Please provide comments re blog.

  5. Corey Rosenbloom Says:

    Hey Tom,

    Indeed, the US Oil Fund would be a proper vehicle for trading bullish biases on commodity prices, especially oil. It has broken above a potential triple top pattern at $78. There may be a standard retracement before heading higher, but the chart is currently showing a consolidation pattern which may break higher, as per the prior trend.

    The fund will likely follow the commodity, and so viewing oil prices themselves (via the @CL futures or the $WTIC index) can help provide clues for possible resolutions, as well as targets and stop-loss placement.

    Technical analysis does not exist in a vacuum, and the current environment is tilted toward inflation and against the US Stock Market. But there are always unknown variables that can crop up unexpectedly.