Weekly Momentum, Sentiment, Strength and Technical Indexes....
The year-end rally continued last week as the market closed near new highs as well as having its first positive year since 1999. Hard to believe, but 1999 was also the first year the DJIA crossed above the 10,000 mark. Not much progress for four years but the bulls will take it!
For the week, the DJIA gained 85 points (+0.82%) and closed at 10409, up for a sixth week in a row. The NASDAQ gained 33 points (+1.67%) to close at 2006. For the year, the DJIA was up 25.3% while the NASDAQ added 50.0%.
Momentum Index: The Momentum Index is neutral at +3, up from last week's +1 reading. Breath was positive as the NYSE Advance/Decline line gained 2298 units for the week while the number of NYSE stocks making new 52-week highs, which returned to triple-digits, outpaced the new lows on all four trading days. The percentage of NYSE stocks above their 200-day moving average improved to 89.0% from 88.0%, while those above their 50-day jumped to 73.9% from 69.1%.
Sentiment Index: The Sentiment Index is neutral at +0, unchanged from last week's neutral +0. VIX came off its lows but remained bearish at 18.31, up from last week's 16.66. Readings under 20 are regarded as bearish signaling excess complacency in the options pit. The percentage of bullish investment advisors remains bearish at 58.3%, unchanged from last week's 58.3% reading. For the week ending 12/30/03, U.S. equity mutual funds had inflows of $1.6 billion compared to inflows of $1.3 billion the previous week. U.S. Equity funds have now had positive inflows for eight months in a row.
Strength Indexes: Two of the Strength Indexes remain firmly in bullish territory while the QQQ again showed weakness, remaining in bearish ground. The percentage of Dow (DIA) stocks under accumulation was steady at 80.0% unchanged from last week. The NASDAQ-100 (QQQ) eased to 41.8% from 45.9% while the S&P-100 (OEX) increased to 70.7% from 69.7%. Readings over 50% indicate that the majority of the stocks in the index are under accumulation, a short-term bullish condition.
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TECHNICAL OPINION - DOW JONES INDUSTRIAL - 01/02/2004
Daily Opinion: HOLD/SELL
Friday's Bearish (down) move, forming a recent high, is accompanied by below average (89% of average) volume. This day's price action formed a Bearish Key Reversal which suggests the index will go lower in the short term.
Short-Term Opinion: HOLD
On a short-term technical basis, the trend is Bullish (up) and the index is above its 50-day moving average at 9922.15 which also confirms its Bullish (up) trend. The index is extremely overbought according to the Stochastic indicator (86.58), so look for a possible pullback.
Long Term Opinion: OUTPERFORM
On a long-term technical basis, the index (INDU) is trading above its 200-day moving average which implies it is in a positive trend.
The index has support at 9922.15 and in the 9600 area. If the index breaks down through support at 9922.15 then it will probably continue lower to the 9600 area. The index will meet resistance at 10527.00 and 11141.52. If the index breaks up through resistance at 10527.00 then it will probably continue higher to 11141.52. The 200-day moving average is at 9245.61. This will also act as support. The index is extremely overbought according to the Stochastic Indicator (93.53), so look for a possible pullback soon.
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TECHNICAL OPINION - NASDAQ COMPOSITE - 01/02/2004
Daily Opinion: HOLD
Friday's churning relative to the opening price, forming a recent high, represents a neutral reading.
Short-Term Opinion: HOLD
On a short-term technical basis, the trend is Bullish (up) and the index is above its 50-day moving average at 1943.30 which also confirms its Bullish (up) trend. The index is extremely overbought according to the Stochastic indicator (87.18), so look for a possible pullback.
Long Term Opinion: OUTPERFORM
On a long-term technical basis, the index (COMP) is trading above its 200-day moving average which implies it is in a positive trend.
The index has support at 2000.92 and 1887.46. If the index breaks down through support at 2000.92 then it will probably continue lower to 1887.46. The index will meet resistance at 2022.38 and the 2100 area. If the index breaks up through resistance at 2022.38 then it will probably continue higher to the 2100 area. The 200-day moving average is at 1727.00. This will also act as support. The index is extremely overbought according to the Stochastic Indicator (85.44).
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TECHNICAL OPINION - S&P 500 - 01/02/2004
Daily Opinion: HOLD
Friday's Bearish (down) move, generating a recent high, formed a Bearish Key Reversal which suggests the index will go lower in the short term.
Short-Term Opinion: HOLD
On a short-term technical basis, the trend is Bullish (up) and the index is above its 50-day moving average at 1062.77 which also confirms its Bullish (up) trend. The index is extremely overbought according to the Stochastic indicator (91.35), so look for a possible pullback.
Long Term Opinion: OUTPERFORM
On a long-term technical basis, the index ($INX) is trading above its 200-day moving average which implies it is in a positive trend.
The index has support at 1074.30 and 1007.71. If the index breaks down through support at 1074.30 then it will probably continue lower to 1007.71. The index will meet resistance at 1118.88 and 1208.59. If the index breaks up through resistance at 1118.88 then it will probably continue higher to 1208.59. The 200-day moving average is at 992.52. This will also act as support. The index is extremely overbought according to the Stochastic Indicator (95.27), so look for a possible pullback soon.
Good luck.
Regards,
Naz
AI
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