Weekly Momentum, Sentiment, Strength & Technical Indexes........
The market took off on Friday following a cautious week of trading as the March employment report posted the strongest growth rate in four years. All of the major indexes posted significant gains for the period as Friday’s rally pushed the DJIA over 10400 for the first time since 03/09/04. For the week, the DJIA gained 258 points (+2.52%) and settled at 10470.
The NASDAQ, led by high-tech stocks, also scored impressive gains as the index crossed back over the 2000 mark. On a percentage basis, the NASDAQ outperformed the DJIA by almost a 2:1 ratio. For the week, the NASDAQ gained 97 points (+4.95%) and closed at 2057. For the year, the DJIA is up 1.70% while the NASDAQ is up 2.67%.
Momentum Index: The Momentum Index is neutral at +2, up a notch from last week’s neutral +1. Breadth was positive as the NYSE Advance/Decline line, which posted a new all time high, gained 4567 units for the week. In addition, the number of NYSE stocks making new 52-week highs, in triple digits all week, outpaced the new lows on all five trading days. The percentage of NYSE stocks above their 200-day moving average found firmer ground rising to 80.2% from 74.6%, while those above their 50-day jumped to 56.7% from 35.3%.
Sentiment Index: The Sentiment Index is neutral at 0, down from last week’s +1 reading. The Index Put/Call ratio rose slightly to 1.62 from last week’s 1.46 while VIX remained in bearish territory at 16.65, down from 17.88. Readings under 20 are regarded as bearish signaling excess complacency in the options pit. The percentage of bullish investment advisors inched up to a neutral 46.0%, up a touch from last week's 45.4% reading. For the week ending 04/02/04, U.S. equity mutual funds had inflows of $2.8 billion compared to inflows of $580 million the previous week.
Strength Indexes: The Strength Indexes continue to remain in negative ground but all three showed some improvement. The percentage of Dow (DIA) stocks under accumulation climbed to 6.7% from 3.3% as did the S&P-100 (OEX) which rose to 18.2% from 13.1%. The NASDAQ-100 (QQQ) rose to 19.6% from last week's 14.4%. Readings under 50% indicate that the majority of the stocks in the index are under distribution, a short-term bearish condition.
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TECHNICAL OPINION - DOW JONES INDUSTRIAL - 04/02/2004
Daily Opinion: HOLD
Friday's very Bullish (up) bar with above average volume (122% of average) suggests a possible move higher on the next day.
Short-Term Opinion: HOLD
On a short-term technical basis, the trend is Bullish (up) and the index is slightly above its 50-day moving average at 10466.01 which also confirms its Bullish (up) trend. The index is extremely overbought according to the Stochastic indicator (81.01).
Long Term Opinion: HOLD/BUY
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 10,466.01 and 10,022. If the index breaks down through support at 10,466.01 then it will probably continue lower to 10,022. The index will meet resistance at 10521.70 and 10,700. If the index breaks up through resistance at 10521.70 then it will probably continue higher to 10,700. The 200-day moving average is at 9850.22. This will also act as support. The index is neutral according to the Stochastic Indicator (56.92).
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TECHNICAL OPINION - NASDAQ COMPOSITE - 04/02/2004
Daily Opinion: HOLD
Friday's very Bullish (up) day suggests a continuation higher on the next day. Friday's gap up in price suggests further new highs are ahead. Sometimes a index will pause, or retrace for a few days to fill the gap, before continuing higher.
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 2023.47 which also confirms its Bullish (up) trend. The index is extremely overbought according to the Stochastic indicator (85.58).
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 2023.47 and 1901.06. If the index breaks down through support at 2023.47 then it will probably continue lower to 1901.06. The index will meet resistance at 2069.02 and 2150. If the index breaks up through resistance at 2069.02 then it will probably continue higher to 2150. The 200-day moving average is at 1901.06. This will also act as support. The index is slightly overbought according to the Stochastic Indicator (65.22).
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TECHNICAL OPINION - S&P 500 ($INX) - 04/02/2004
Daily Opinion: HOLD
Friday's very Bullish (up) day suggests a continuation higher on the next day. This chart ($INX) does not have Volume available for use in the gerneration of the Daily Opinon. Because, there is no volume recorded on this particular chart, the Daily Opinion is somewhat limited.
Short-Term Opinion: HOLD
On a short-term technical basis, the trend is Bullish (up) and the index is slightly above its 50-day moving average at 1133.56 which also confirms its Bullish (up) trend. The index is extremely overbought according to the Stochastic indicator (83.74).
Long Term Opinion: HOLD
On a long-term technical basis, the index ($INX) is trading above its 200-day moving average, but has broken through an important support level, which implies it is in a neutral trend.
The index has support at 1134.43 and 1074.30. If the index breaks down through support at 1134.43 then it will probably continue lower to 1074.30. The index has resistance at 1155.38 and 1247.53. If the index breaks up through resistance at 1155.38 then it will probably continue higher to 1247.53. The 200-day moving average is at 1059.87. This will also act as support. The index's long-term uptrend has changed into a sideways or downtrend. In this case, the index will either go sideways for a while or sell-off back to where it started prior to the latest big upmove. This is a risky time for the index, so be careful. Use caution during times like these, as the index will be more volatile. Pay close attention to the Short-Term and Daily Opinion. The index is neutral according to the Stochastic Indicator (59.27).
Regards,
Naz
Support for the DJIA is 10022 followed by 9850 while resistance is in the 10700 area. Support for the NASDAQ is around 1880 with resistance at 2150.
AI
