Saturday, May 31, 2008

Qs Weekly Update

Here's Trading Day's spin on the Qs' prognosis. Good site, good tools and free.
Above, 3 linear regression studies (30,11,3) on weekly and monthly update bars.
For the week, Qs down .45 or 1%, DIA flat, SPY down 1%, IWM down .5%
The Qs have flatlined on the weekly bars for the past month, with a slight positive skew.
On the daily bars, mean reversion on the LR30 would bring the Qs back up to 50.25.
Weekly bars have the Qs riding the upper LR30 channel, and with the current lateral consolidation in progress, the path ahead offers few clues, other than the mantra, "never short a dull market."
The monthly bar closed enthusiastically above the LR30 mean and is currently upslope in a mirror of the pattern that developed mid 06.
The short term path of least resistance for the Qs is currently UP in a repeat of last year's seasonal pattern. Unfortunately, the market will always do the unexpected, and this year's fundamental milieu is decidedly different from last year. As suggested several weeks ago, the rise in the Qs may be a case of the lesser of a few evils - little financial, housing and retail exposure. A50 has turned up again and the A200 has once again broken above the 200 DSMA. Both the A50 and A200 are showing positive momentum without breaching overbought levels.

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