Tuesday, October 03, 2006
NASDAQ Chart of the Day
RBAK
has formed a clear, bearish pennant consolidation at the lows of the latest
decline, which also happens to be the right shoulder of a bearish
head-and-shoulders pattern. A downside break through 13.50 could make for big
weakness ahead.
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NYSE Chart of the Day
ACL has gotten a big downside break through the bottom of an odd
triangle consolidation, which is quite better. Watch for continued weakness
from this stock.
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Trading Education
Tutorial
Measured and Exhaustion Gaps
Identifiable Patterns After Confirmation Move
We have previously mentioned the three types of gaps that are of
relevance to investors - the breakaway gap, the measured (or continuation) gap,
and the exhaustion gap. We previously discussed the breakaway gap, but it is
important to discuss the measured gap and exhaustion gap at the same time. Why?
Because it is difficult to tell one from the other until after the fact...
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Can
Divergences Tell You When to Stick a Fork in the Stock Market
SPX: SA mere glance at the latest averages reveals a stock market
rife with divergences. History shows that narrow leadership or the failure of
important averages to confirm can pose a grave threat to the stock market...
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Picks - Read More
S&P 500
Forecasting Video Online Now - Get It for FREE!
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Weekly
Market Update
The down trend that started back in May and has taken us all the
way from 1677 to 1446 is almost undone now. Friday's high was 1666, which is
only 11 points away. It is very rare that the market gives back a whole trend
like this in one shot. Most trends bounce back 38%, 50% or 62%, but very rarely
do they bounce 100%. I would say that the market will break out of this channel
to the down side for some profit taking. We actually completed a double top on
Friday, which shows short term weakness...
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The QQQQ Report for October 2nd -
October 6th, 2006
QQQQ:
The five consecutive closes above the 200-day moving average that we've seen
over the past trading week suggest that the bulls are in the process of
changing the direction of the QQQQ's long-term trend...
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Daily Market Commentary
Updated Monday, 10/2 for Tuesday's market
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Key DOW Levels for 10/3
|
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UP
|
Above 11,750
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DN
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Below 11,650
|
In the Range...
- Dow remains within clear consolidation range, watch the
boundaries tomorrow. The index sold off late in the day, but halted its decline
right at the lower boundary of the clear consolidation that continues to form
at the highs. Watch this range for big movement ahead.
- The NASDAQ and S&P each got big downside breaks from their respective
consolidations, which is quite bearish. If the indexes hold beneath near-term
support, more selling could be ahead.
Summary
The Dow continues to wind up within the clear consolidation range. Look for
more range movement ahead of the big breakout. A breakout should finally yield
big movement.
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