ChartsEdge's (U.S. equities) map for 4/28; oil slipping down slope of hope; and other comments

Market Map for Apr28

Posted: April 27th, 2009
Author: Mike Korell
Filed under: One-Day Market Map
Comments to ChartsEdge »

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Thanks once again to Mike and ChartsEdge! Today looked like a see-saw struggle between the daily map and their week-cycle forecast, and it looked like the daily map ultimately prevailed. The declines including the current futures doesn't look like they necessarily break trendline support, but of course there are views in which moving down from here implies lower targets. I'm a little hesitate to post what my personal views are, partly because I don't want to look biased or stupid (LOL) and partly because I can still see this going either way. But one thing seems fairly certain - although it's a bit premature to say, but the ChartsEdge weekly forecast looks like it may not "work" for us this week. But do keep it in mind, and do consider it for timing of cycle lows/highs during the week. Then there's the Fed on Wednesday, with any announcement at 2:10 pm (Eastern Time). I'm starting to wonder, if the Fed has to make tough choices about what gets propped up .... nah, I'll stick to the technicals tonight.

I remember making comments at one point about other industries that might start contributing more seriously to market declines, not just the banks. Well today "investors" decided to target the transports, and they did fall under the 3000 level I've been mentioning. When you look at my chart of the Dow Transports (below) you can see that this index fell to support, so it didn't break support yet. But remember I mentioned that "investors" or traders might seize upon a trigger day that looks like a loss of the 200-month moving average at about 3000? Well based on having lost that level today, I do believe that this index should be viewed skeptically unless and until it can regarding that level. The slight increase in volume with today's drop contributes to my thought that a pullback, or more, may be arriving for the transports. (I know, people are blaming swine flu ... the chart already placed the transports into position for a pullback, but maybe swine flu will become the new excuse for a lot of sectors!)

Then there's oil ... I remember posting a while ago showing the daily and monthly charts, and how oil had risen nicely but not hugely in an uptrend channel. It had just fallen to the bottom of that channel the last time I remember posting about it. I stated that it could be a speculative long if it didn't lose that level. Well it wobbled down under it a bit, then rebounded to an interim swing high, and weakened off again. Sure enough, after moving outside that uptrend channel it moved sideways, then even lost its 50-day moving average! Did a little pullback up, but then it fell again and tonight there's talk of less oil usage due to - that's right, swine flu is being blamed now for a drop in oi also! I would not put it past this chart and the monthly chart, to see oil drop to a new low. Certainly it's hurt by having fallen under the 50-day moving average!

I already posted about the dollar this afternoon, and there's buzz this evening about the yen and the euro. Maybe we see the dollar and the yen push up more against the euro per the charts I've been showing - finally!

Then, there's the McClellan Oscillator - it moved down a bit more for the Nasdaq, pointing toward but not (yet) at the zero line. [Not posting it here since I just posted the McClellan charts as of Friday, at my UBTNB3 blogspot.] Similar with the ratio indicator but the Summation Index looks like it remained relatively high. The NYSE McClellan chart has the same look, except its Oscillator didn't edge under the interim swing lows of the recent weeks (as Nasdaq's did).

Finally there's the NDX:SPX ratio, which I did post (below). You can see it pushed to a higher level today, and there's bearish divergence in the RSI indicator on that chart. Since it's an indication of investor interest in buying "riskier" securities or general bullishness (and we haven't posted it in a while), it's worth taking a look since it's looking closer to a peak of some level.