Friday, February 08, 2008

Qs Weekly Update

Charts top to bottom:
Qs monthly, weekly, daily 3 linear regression studies (30,11,3).
The monthly chart has the Qs midway between the mean and lower channel band with the MACD suggesting the likely direction to be back to the lower band.
The weekly chart more clearly displays the Qs in a consolidation phase (possible bottoming?) for the past 3 weeks, with a developing hairy bottom formation. This is typically a bullish indication. But, the MACD is negative slope and the RSI is coming off an extreme oversold condition, so the net projection is neutral.
The daily MACD are RSI signals are identical to the weekly, which is of significance as the Qs continue to ride the LR30 mean down slope since the 2008 turn. Projecting off the daily LR30 channel we might expect the Qs to rally to 44.80 before hitting overhead resistance of some significance. If that sounds bullish, just remember that less that 2 months ago the Qs were nudging 50, so it's important to keep things in perspective. The daily channel is still headed down and until indicators suggest otherwise, I'm expecting a test of support at 42. Meanwhile there are no fundamental developments in the economy that want me to put on a happy face. Unemployment is up (no surprise), retail sales are off, the iceberg in the financials is yet to surface, and for some reason homebuilders are on the rise (I suspect that scenario may change soon). For risk management sake it's a time to scale down your trade size and pick your battles carefully. I'll continue to fade the gap ups for the short term.
Finally, a musical interlude from the world's greatest albino Texas blues guitarist to keep you company while you surf the web.

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