My Elliott wave interpretation of the S&P 500 2 months ago was wrong and the index put in a new high up to 3.4% gain since my last post. But upward momentum has been lost and many stocks have given sell signals according to stochastic cycle analysis on the weekly charts. Weekly 50 moving averages have turned down or are flat on some blue chips among others. These include CAT, GM, HPQ, IBM, JNJ, KO, MCD and QCOM. These should lead the pack down. The pattern in banking stocks suggests a terminating diagonal triangle which also suggests a strong drop, but their 50 MA's are still trending up. I can't exclude a blow off top. Any run up to new highs would be exciting, but should be short lived.
I suggested oil stocks would make a 10-20% run up last post. They made about 8-10% and now are looking pretty weak. SXL bounced around up to 44 but has continued it's drop as I predicted and it's got more to fall. The arrows on the chart are one's that I drew on February 28.
One of the dollar store stocks is looking strong. FIVE maybe going to new highs above 50. Now at 38ish. I have a stop in at 33.
Summary: Upside potential limited. Downside likely.
Trade at your own risk. I am not a professional.
I suggested oil stocks would make a 10-20% run up last post. They made about 8-10% and now are looking pretty weak. SXL bounced around up to 44 but has continued it's drop as I predicted and it's got more to fall. The arrows on the chart are one's that I drew on February 28.
One of the dollar store stocks is looking strong. FIVE maybe going to new highs above 50. Now at 38ish. I have a stop in at 33.
Summary: Upside potential limited. Downside likely.
Trade at your own risk. I am not a professional.
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