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Old Fool Notes - 02/04/16Are we having fun yet? The daily chart shows that we continue to slog along, basically flat with a very slight upward tilt. The OBV is trying to be happy but the other indicators are not doing anything. The hourly chart shows that we have been stuck in a range of 4450-4575 for about 14 days and there is no indication of escape. Can't do much with that. The ratio chart is trending bullish but is fragile. It needs a couple of more days - one way or the other. The weekly chart is stuck in a downtrend but note it has been flat for the past 4 weeks. No help either way. The Wilshire chart has been in a mini-uptrend for about the past 2 weeks. The indicators are moving in a bullish direction but have not broken out yet. Since the Wilshire is a very broad index, this movement is encouraging. The P&F chart is our "chart of the night." Many of you know that I love P&F charts because that is what I grew up with back in the 1960s-1970s (BC - when we had to do all of our charting on K&E graph paper). You can learn a lot from this chart. First - for those of you that trade, you had ample warning of a breakdown. I count 4 down signals - 4910, 4880, 4850 and 4730. Frankly, any die-hard bull trader should have bailed at 4800. Ok - so much for looking backward, what can we tell about the way forward. We can clearly see that we need another 100 points - up to 4640 to dig out this hole. We can also see that a dip below 4420 would signal another trip down. Finally, a move above 4730 would suggest blue skies ahead. Finally, both of the summation charts suggest we are close to a bottom. No, I am not calling a bottom, just pointing out what the charts say. For me, I have been shopping the "beat down, blue chip, dividend paying, bin" for the past couple of weeks. I have picked up some XOM, CVX, CAT and CMI. Still have a fair amount of cash in reserve in case we have further to fall. In summary, things are looking better, but as the P&F chart indicates, we have more work to do. Charts are updated at Stockcharts. http://stockcharts.com/public/263429 Have a good evening, The Old Fool |
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Msg # | Subject | Author | Recs | Date Posted |
59533 | Re: Old Fool Notes - 02/04/16 | nasus25438 | 1 | 2/5/2016 2:11:43 AM |