DJIA Market Wrap1 November

The 60-minute trend is negative according to the force index indicator. %b has printed a slightly positive divergence. Prices are testing the lower trendline of the recently formed downward channel. Finally, the long awaited correction has started. At 9600 there is an important level; here there is an open up gap printed on 6 October. The closure (already occurred in the S&P) would confirm the negative phase. Many stocks are trading below their 20-day moving averages, but the picture is still positive in the longer term moving averages. Some stocks printed new 20-day lows (BAC, CSCO, GE, HD, JNJ, JPM, MRK). The Dow is also doing better than the Nasdaq in this phase. I remain negative on the market although there may be temporary rebounds.


In the Figure you can see a summary of the trend conditions of the Index stocks. I used the 20, 50, 100 and 200 days moving average of the close. The background is Green when the close is > than the moving average. Red when it is below and yellow when it crosses. + and - indicate the slope of the moving average.

RANGE ANALYSIS
I have also programmed Tradestation Radarscreen to display:
- range of the past 20 trading sessions (%);
- % from the lowest close of the past 20 trading session. The cell
is RED if the close of today is the lowest close of the past 20 days.
- % from the highest close of the past 20 trading session. The cell
is GREEN if the close of today is the highest close of the past 20 days.
In the other columns I included the % of the close from the 20,50 and 100 days moving average.

CONSECUTIVE UP/DOWN CLOSES
I have programmed the Tradestation Radarscreen to display how nany consecutive up/down closes have been printed and what is the probability that the next day tomorrow) the asset closes in the opposite direction. I have calculated the probability using the past 1000 trading days.

The stocks object of screening are:
3M Company (MMM), Alcoa Inc (AA), Altria Group Inc (MO), American Express Company (AXP), American International Group Inc (AIG), At&t Inc (T), Caterpillar (CAT), Citigroup Inc (C), E.I. du Pont de Nemours & Company (DD), Exxon Mobil (XOM), General Electric (GE), General Motors Corp (GM), Hewlett-Packard (NYSE:HPQ), Honeywell International Inc (HON), IBM (IBM), Intel Corp (INTC), Johnson & Johnson (JNJ), JPMorgan Chase & Co. (JPM), McDonald's Corporation (MCD), Merck & Co. (MRK), Microsoft (MSFT), Pfizer Inc (PFE), The Boeing Company (BA), The Coca-Cola Company (KO), The Home Depot (HD), The Procter & Gamble Company (PG), United Technologies Corporation (UTX), Verizon Communications (VZ), Wal mart Stores Inc (WMT), Walt Disney (DIS).