Weekly Charts
An incomplete post today due to Technical Difficulties.
Week Ending June 19, 2020
Three of the four major U.S. stock indices closely tracked by this newsletter are ending the week with weekly price gains. The outlier is the Dow Transportation Stocks Average that will close today with a tiny weekly loss of -4 points (-0.05%) at 9,077. By far the best performing index for the week is the technology stock-heavy NASDAQ Composite that will close with a weekly gain of +357.32 points (+3.73%) at 9,946.12. The broad-based S&P 500 will end the week with a gain of +56.43 points (+1.86%) at 3,097.74. The Dow Industrial Average will close the week with a gain of +265 points (+1.04%) at 25,876. For the NASDAQ Composite Index today’s closing price is a new all-time weekly-close price high.
The six various time-length moving averages of the NYSE daily ratio of new 52-week highs divided by that day’s total of both new 52-week highs and new 52-week lows are confirming the weekly price rises registered by three of the four major U.S. stock indices. One week ago they failed to confirm the brief “panic attack” price declines experienced from June 8 through June 15 by all four indices. We therefore should not be surprised with this week’s immediate reversal of last week’s “panic attack” by the NASDAQ Composite, S&P 500 and Dow Industrial Average. Among the six moving averages all but the shortest-term 10-week moving average are recording weekly rises. The 10-day moving average is virtually unchanged from one week ago, slipping down to 90.0% from 91.0% on June 12. Needless to say, of the NYSE is consistently producing daily new high/new low ratios that average 90.0%/day then price momentum remains very strongly upward.
The bigger news this week is that all four 50-day through 200-day moving averages recorded weekly rises. This represents a directional change for the intermediate-term 100-day moving average to rising from falling. “Replacement” columns in this week’s regular table (MISSING) for both the 100-day and 150-day moving averages will favor that they continue rising in the upcoming week of June 22-26. The 100-day moving average calculation will be “replacing” daily ratios that average 68.6%/day and the 150-day moving average calculation will be “replacing” daily ratios that average 58.7%/day. Both of these “replacement” rates are well below the current levels of all three 10-day through 50-day moving averages. However, the longest-term 200-day moving average calculation must “replace” daily ratios that will average a very high 90.4%/day in the upcoming week and average 91.4%/day in the following holiday-shortened week of June 29-July 3 (markets will be closed on Friday, July 3 in observance of the Independence Day Holiday). We can make no assumption that the 200-day moving average will continue to rise. In fact, a directional reversal to falling from rising will be much more likely.
“Replacement” columns in this week’s table for the two short-term 10-day and 20-day moving averages also will strongly favor that these two NYSE new high/new low ratio moving averages which are most closely correlated with the direction of movement of the S&P 500 Index will fall simultaneously in the holiday-shortened week of June 29-July 3. The 10-day calculation must “replace” daily ratios that average 92.6%/day and the 20-day average must “replace” daily ratios that average 95.3%/day. Both “replacement” rates are higher figures than is the current 10-day moving average. We should therefore anticipate that the S&P 500 and other major indices will experience at least a short-term “pullback” in the final week of June and first two days of July. This could develop into something which lasts longer and inflicts more price damage than does a typical “pullback”. Much will depend upon the news bulletins regarding the pace of business re-opening from the COVID-19 lockdowns, or the lack thereof. Today’s announcement by Apple Computer (AAPL) that it is re-closing its retail stores in four states (Florida, Arizona, North Carolina, South Carolina) which have experienced sharp upward spikes in new COVID-19 infections does not offer an optimistic news outlook.
“Replacement” columns for both short-term 10-day and 20-day moving averages for the two upcoming weeks show that both moving averages will be severely challenged to rise in both weeks. The probability that both will turn down very nearly simultaneously from short-term weekly high inflection point greatly increases the likelihood that the S&P 500 and other major indices will change their directions of price movement with them, based upon history. A short-term “pullback” may already have begun if the S&P 500 daily-close high water mark at 3,232 it posted on June 8 is to be used as the starting point.
stonehengeanalytics.wordpress.com 