Saturday, December 5, 2009

Transports, S&P 500 & TSX

Two of the charts below are somewhat dated (Novemeber 25th) and were emailed on Novemeber 26th but may be still pertinent from a broad analytical point of view. However the potential break of the transports to the upside must be recognized.

Dow Transports:

Friday's action was interesting. The potential triple top on the Transports was taken out on a closing basis which is a constructive sign for the equity markets in general. Momentum has turned up--albeit from heightened levels. Friday's 'candlestick' is rather ambiguous since the shadows are of equal length suggesting that the tug-o-war between the bulls and bears was a draw.

*right clicking the mouse will give you the option of opening the charts in a separate tab or window.*

This is the Transport chart from Novemeber 25th showing a possible a-b-c correction. However, seeing as the Transports possibly broke to the upside this analysis could be negated on any continuation above the potential triple top.

S&P 500

The chart below is as of Novemeber 25th: Since then the S&P has continued its sideways drift--making marginal new interday highs but failing to hold them. A break below 1080 would strongly suggest a further decline is imminent. Momentum continues to wane and the turbulence in the metals andbond markets could shake the stock market out of its recent doldrums.

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