Friday’s action put a damper on the week’s action. How did the Stockcharters see it?

A welcome boost for Maurice Walker as his list ranks top amongst the market commentators. He saw multiple sell triggers on Friday’s action:

We got a wonderful sell signal on May 20, as the DJIA broke its intermediate trendline which was confirmed that very day with a bearish direction indicator (DI) cross on the ADX indicator and bearish confirmation on the MACD. The following day on May 21 the S&P 500 broke down and it got a bearish DI cross. Moreover, on May 26 the Aroon gave a sell signal on the DJIA. The S&P’s 500 sell signal came on June 2, as the first right shoulder formed on the S&P 500 near 1400. We also got excellent candlestick reversals at the 200-day SMA , as shooting star reversals appeared on both the DJIA and …

It was a difficult week for investors, almost regardless of market sector. As we have observed in our last several updates, a general deterioration in market sectors helps the investor get a good feel for the overall market. Last week we wondered whether there was anyplace to “hide”. We noted that the inverse market sectors ETF’s were showing surprising strength.

Markets versus Sectors

Most ETF investors are interested in finding the best sectors. The advantage of considering market ETF’s and their inverses — SPY and SH, DIA and DOG, QQQQ and PSQ — is the ability to compare the overall market to individual sector performance.

Sector concentrations have a higher beta — more risk and more reward. It is unusual for a play on the overall market, long or short, to have more appeal than individual sectors.

Last week’s emergence of the ETF index shorts was quite …

Price is clearly lower this morning but the QQQQ has come down to a level where there may be buyers.50 DMA ~ 47.85Daily S2 ~ 47.77Prior support found ~47.75Remember that the more times support is tested, the more likely it is to fail to hold and any purchases here (other than to cover short sales) are very risky.

April 28, 2008

This was a pretty slow day and investors are going to mark time, absent other market moving news, until the Fed makes its next decision. The volume today was ultra-light.

Let’s face it; bulls have seized the tape with “the worst is behind us” line regarding financials and the credit crisis. From the WSJ was this quote attributed to T. Rowe Price portfolio manager Daniel Shackelford, “We established that the Fed was going to backstop the markets, keep things stable and slowly but surely nurse the markets back to health…risk-taking has come back in the market.” So, that’s the bullish spin.

And, things do look better, but hold on a second. Below is a …

“Unless there’s a financial Armageddon everything will be just fine.”
SAM Advisors

Truer words were never spoken. This is why I don’t watch financial TV during the day and am glad not to be a guest saying dumb things.

So, we got some dollar pumping and related commodity weakness as the WSJ suggested that the Fed may cut a quarter point on Tuesday and then stop. C said they’d keep the dividend and everyone got all lathered-up to sell the previously hot commodity sector and buy financials.

Volume picked-up smartly but breadth wasn’t really impressive. [You’ll note Yahoo/Finance’s continuing struggle with math 101.] The action was focused in bigger names but the A/D line in the NASDAQ was negative meaning the heavy volume was focused in the biggest names.

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