Weekly Analysis & Pre-Market Analysis 8/11

It was party on Wall Street on Friday.

For the week of Aug 4:
- DOW gained 3.6 %
- S&P 500 gained 2.9%
- Nasdaq gained 4.5%
- Russell 2000 gained 2.5%

Which is in line with what I said in my weekly analysis.

D commented I could toss a coin and come up with the same conclusion.

FINE.

D shall do his own analysis from now on.

>:)

I've said this more than once and I'm going to have to keep repeating it: I do NOT predict the market.

And being right doesn't make me feel like I deserve a trophy.

But being wrong would make me search for the reasons that I was wrong, and in the process, I picked up new skills and knowledge that I believe have made me become more attuned to market signals and sentiments. And THIS is the main reason that I do my pre-market analysis.

Ok, I've sidetracked again... Someone once commented that I love going North, South, East, West, then come back to East, then to South (something along that line)etc when I communicate. Simply put, I'm hard to follow.

And I agree. I lose some people at every para and I wonder how many actually survive an entire posting I put up...

OK, I've gone to the Arctic and back...to TRADING.

WHAT I AM EXPECTING TO SEE THIS WEEK

Nothing much has changed in the finance and housing arena, so anything that could drastically move market now could only come from OIL and econ data.

OIL
Crude oil has gone up a dollar and closed at $116 a barrel. That's a rather unpleasant surprise after the previous $5 drop. Threat of interrupted supply due to tension between Russia and Georgia is likely the main cause. A rising dollar is allegedly the other factor.

ECON DATA
Econ data to be released this week (calendar extracted from briefing.com):



Little wonder that it's difficult for me to be bullish for this week (More details below)...

So much for news and all...after all, it's hours away from market open, and ANYTHING CAN HAPPEN from now til then...

CHART TIME!!!

DOW Weekly



WHAT I SEE

I see a lot of things that make me see bears everywhere.

1) Bearish Flag

2) Price rising and closing above major resistance without corresponding rise in volume.

3) Long body of Aug 4 candle suggest an overbought situation.

I'm bearish on DOW for the week.

DOW Daily



WHAT I SEE

- Bearish divergence for period Jul 23 - Aug 8

- Major resistance at 11756 posing a challenge to DOW

- Declining volume since Jul 18, which is rather telling of a market that's not inviting new buyers

- Price is below 200 MA and 50 MA is below 200 MA (what's more, they don't look like they are converging).

Hence, for the day, I'm bearish too.

That officially makes me bearish on the DOW both in the intermediate (see my earlier post) and immediate term.
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Nasdaq COMP Weekly



WHAT I SEE

1) Week of Aug 4 has closed above resistance, which was previously a support formed by a hammer on Aug 13 07. Another close above would be more assuring for the bulls.

2) Price rallied from on Mar 17 this year with the formation of a bullish engulfing pattern and found resistance in mid may - early jun.

Two bearish candlestick patterns drove price down to slightly above its previous low (on Mar 17). A hammer on Jul 14 sent price up again.

Provided there's not going to be any news that are more dampening than what we've seen, price could likely go up to resistance formed by neckline (in green) of previous head and shoulder pattern.

Why do I think that?

Answer's the hammer.

As far as this week's concerned, I'm bullish on COMPQ.

As for today, I'm expecting some profit taking from Friday's session.

Daily chart (see below) shows a bear wedge that's failed; price has closed above resistance twice.

This is enough basis for COMPQ to continue its rally in the next few days.

But for today, I'm not expecting price to go higher than Friday's.

Not when oil's going up.

COMPQ Daily


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RUT Weekly



WHAT I SEE

- Price testing major resistance and

- Price moving in between 50 and 200 MAs, which are closing up.

Rut looks like it will trade in a boxed range of 685 to 785 for the week.

RUT Daily



WHAT I SEE

- Price closed above resistance and broke out of bullish wedge on Fri

- Doji on Jul 15 sent price climbing steeply until 23 Jul but shooting star on Jul 23 and bearish engulfing pattern impeded its upward move. Long body of Aug 8's bullish candle could help give a little lift though.

I'm not expecting a very strong move up today from Aug 8's session, but am still bullish on RUT for today.