Outlook for Selected Markets. DJIA - S&P 500 November 27/04
by Bill Voeten
November 27/04
ummary for Week Ending 27th November 2004
In a week shortened by the holiday and the mid session breakup
party, we didn't see too much happening. After last weeks efforts at declining
the market did start to make a move forwards but this was not, as yet,
very convincing. Little other news of any real interest to me, or the
markets for that matter and this is reflected in the weeks action.
Last week I mentioned I would be looking to see how the Nov 17 high worked
itself out. I thought we may have had at least another day down to follow
the previous Fridays drive lower but Monday simply touched a new low and
then recovered. Following on from that we saw the market make very slow
and very painful movements forwards which brings me to my next topic of
concern : The number of days in correction.
From Nov 17 the market spent 3 trading days into the decline, finishing
on Monday. If we ignore the initial Inside day on the 18th then we have
only a 2 day decline, but the most significant decline since the 7th Oct.
A short run in decline is usually followed by an equally swift recovery
and the trend continues. If we do not see the similarly swift recovery
then we have the first signal that the trend is in danger. Looking at
the chart we have had 3 trading days of recovery but are yet to reclaim
the space of the decline, so we have an indication of a trend beginning
to struggle. Looking at volume we can also see volume petering out as
the market rose, but with the midweek holiday, this may be a confusing
and deceptive marker so I will be ignoring that for the moment.
Until this works itself out, we can still go either way, but what we have
is Price/Time square working out on Nov 17th and the market duly falling.
Since that date the market has failed to recover to a new high, so the
signals at present are for more declines in the near term. If the market
does make a new high then this would negate the significance of the 17th
high and we start looking at what the market may hold from that point.
As highlighted last week, the areas of support, should the market decline,
are still valid. These levels are 1163, and 1142. With the the market
hovering around 1182, we are still a long way off these levels, if we
ever see them at all. Apart from that there isn't too much happening,
and we have little option other that to sit back and watch to see which
way the wind is really blowing.
In the coming week the primary interest will be if the market fails to
a new high and puts in a lower swing high.
Note ! The Australian All Ords
has been rocketing lately. Have a look at this weeks chart I have provided
showing the Price Squaring off the 1987 low. It have been quite regular
and at times, deadly accurate. As you can see from the chart, the next
level is 4022.... The Upper trendline cuts through in early December.
This should be interesting to see how it works out !
Charts
S&P 500 See Chart
Australian All Ords (Weekly) See Chart
Bill Voeten
gannalyst.com