Thursday October 25 2012 7:18 AM CST
I was just going through the various internal indicators over the morning coffee. I am literally stunned at how weak the NASD is compared to the big caps indexes. Apparently the success and weighting of Apple and Google and such have masked the incredibly poor relative performance of the smaller stocks. More on that this weekend. Markets are perking up from an over sold condition this morning but longer term I many indexes are already rolling over.
The week is not over but this longer term weekly chart of the Dollar is pretty clear. the commodity rally since June 1 was sparked by Dollar weakness. It simply got too far ahead of its moving averages. That has now been corrected. The buck is moving back up off its longer black uptrend line. Stocks and commodities move opposite the Dollar. RSI at top is ahead of MACD at bottom. RI is moving up and MACD looks to be making a bottom. This will eventually cap the rally in stocks which has been quite weak anyway since mid September.
MYSE Advance Decline Volume
NASD Advance Decline Volume
This is the same time frame and indicators for the NASD, wow, what a much much weaker picture. The indicator has fallen through all the MAs. The black uptrend line has been broken. The CCI indicator has multiple oversold readings. This is what I meant that the strength of a few NASD issues have masked the incredible overall weakness here.
GDXZJ Jr Gold Miners
If GDXJ is going to make a stand this looks like a logical spot for it. I have tentatively labeled a possible four wave pattern. Fourth waves frustrate the market and this one has done just that. CCI has returned to its previous lows. GDXJ is right on its 200 day MA. Gold is up about 15 bucks this morning.
There would seem to be some support in the 1675 area for gold and as in January of this year we could get a quick spike down. Best guess is that we see some supportive action here.
I still have some November call options on GDXJ, but it will need to rally quickly for them to snap back.
More this weekend, but the bottom line is that industrial stocks are seriously weaker, the NASD is way under performing the big caps as we roll to the 40th Anniversary of the 1973-74 Bear Market.