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Of course we never know what tomorrow brings but considering Intel has
traded down 14 points after the close today (Wednesday). [ Hard to
believe.] And from looking at the charts the DJIA and NASDAQ may very
well be in for a correction.
After looking at the New Highs minus New Lows the other night for both
the NYSE and the NASDAQ. I was a little concerned and pondered over it
for some time. From the 5th of February until the 25th of February
(about a month) we were hitting resistance. After breaking through this
resistance, this level of resistance provided support until March 3rd
(about a week) when we broke support.
This told me that the companies which were fighting to make new highs
could not keep those new highs very long. So buyers were not willing to
buy higher. So this raises the question, has the market been in some
form of distribution for the month of February?
As far as the Up / Down Volume ratio both exchanges had good ratios on
the 25th and 26th of February and was accompanied with increased volume.
This provided some fuel to move the market higher, since the fuel (Up /
Down Volume and Total Volume) was running low. i.e., The over all
momentum of this ratio has slowed greatly as measured with the 50 day MA
and the 20 day MA.
Like wise both exchanges have total volume drifting lower except for the
increases that occurred on 25th and 26th of February. Also over the last
two days of trading we can see that volume has picked up on a down day
for both exchanges.
The NASDAQ bounced off of it's old highs today after breaking below it
the day before. It is at the bottom of the intermediate up trend
channel.
The DJIA is about 77 pts. above the bottom of the intermediate term up
trend channel.
As always it is the violation of the bottom channel that determines the
end of the trend.
In light of Intel's earnings and poor market breadth I will go out on a
limb and say we are at a top. Of course the market might tell me other
wise but that is ok since it will also show up in improved market
breadth.
One side note: I was asked to send out some charts and I want to
apologize for not sending them. With a 1- 3/4 year old boy along with
everything else I haven't had time to go through all the hoops to send
charts.
If you are interested in what I use for market analysis you can go to
this URL
http://www.mninter.net/~meyer/TA/HomePageTA.htm
It has some old charts, but at least you can get some insight into what
I am discussing above. It will take you about five minutes or less to
read through it. It might take more if you sit down to study it.
Harley
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