Saturday, June 14, 2008

Qs Weekly Update

Above, the daily and weekly bar linear regression Qs update study (30,11,3).
After a wild ride, the Qs finished down .66 or 1.35% for the week, while IWM and DIA finished down .8% and SPY showed relative strength, losing only .1% for the week.
The week started out fairly ominous, as suggested in last week's update, with the Qs kissing the lower LR30 channel goodbye as the other technical signals all turned negative.
The upslope in volume that accompanied the decline early in the week should have been a clue that more of the same was coming.
The strength into Friday's close was surprising to me, as any of you who have followed me for a while know how negative I feel about Friday afternoon sessions.
The daily candlestick pattern has now turned bullish, supporting the oversold position of the mid-panel technical indicators.
The weekly pattern however, is still rolling over from overbought conditions so, as usual, we have a divergence between the daily and weekly bars (Hey!. . .nobody ever said this was easy!)

The A50 and A200 both bounced off oversold levels on Friday after displaying significant weakness for the previous 4 days. The current position of the A50 resembles that of early November, just before it kissed the 200 DSMA goodbye to the downside so I,m not inclined to get frisky with any bullish plays at this point, despite the various bullish indicators.
The same argument applies to the A200 with relation to the 50 DSMA and next week's price action should give a better picture of what's likely coming down the pike for the next cycle.
This is a time to choose your trades carefully, not only how you trade, but what you trade, as the IWM currently looks technically more attractive than the Qs (check it out, or see next Monday's post).

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