GLOBAL MARKETS ARE ALSO BOUNCING OFF 200-DAY LINES -- HEWLETT PACKARD LEADS MARKET HIGHER -- TECHNOLOGY SHOWING NEW LEADERSHIP

GLOBAL RALLY ATTEMPT... I've been writing a lot about U.S. stock indexes bouncing off their 200-day averages. Those that have slipped under that long-term support line are climbing back above it today. It's important to recognize that the recent downside correction -- and the current rebound -- is global in scope. A lot of big overseas markets are also testing their 200-day averages. And, so far at least, that important support line is holding. Asia got the day going with an impressive rebound. In Japan, the Nikkei 225 Index jumped 2.4% to close at 10967. Chart 1 shows today's close putting the Nikkei back over its 200-day average. [The Hong Kong market rose 3.6% but remains beneath its 200-day line]. European gains ranged from 1% in London to 2% in France and Germany. Chart 2 shows the London FTSE bouncing off its 200-day average. [The German DAX slipped below that line temporarily, but is back above it today]. In North America, the Canadian market has been under pressure along with our market. Chart 3, however, shows the Candian market bouncing off its 200-day line. Yesterday I showed the NYSE and the S&P 500 Indexes bouncing off their 200-day lines. In today's trading, all the other stock indexes are trading back over that long-term support line. Today's rally is being led by technology and material stocks. Once again, energy is the weakest sector.

Chart 1

Chart 2

Chart 3


THE DOW IS BACK OVER MOVING AVERAGE SUPPORT... In morning trading, the Dow is trading at the highest level in a week and, more importantly, is back over its 200-day average. The daily oscillators also show the Dow to be in a short-term oversold condition. The biggest Dow gainers are in the technology group. The three top percentage gainers are Hewlett Packard, Intel, and IBM.

Chart 4


HEWLETT PACKARD GAPS HIGHER... Chart 5 shows today's upside gap in Hewlett Packard, which is spearheading today's market rebound. The stock, however, may meet some selling near its 50 and 200-day moving averages. That puts potential resistance in the 21.5-22 region. The weekly bars in Chart 6 put things in better perspective. It shows HPQ bouncing off chart support along its August/September lows near 19. The weekly stochastic lines are in oversold territory under 20 and appear to be turning positive. Personally, I'd like to see the stochastic lines move back over 20 to confirm an upturn.

Chart 5

Chart 6


NASDAQ 100 LEADS RALLY... It's normally an encouraging sign when the technology-dominated Nasdaq 100 is leading a market bounce -- as it's doing today. Chart 7 shows the QQQ bouncing off its March low at 34 earlier in the week -- and trading over its 200-day line this morning. Its relative strength line is also showing some upside leadership for the first time this year. That's a good sign -- if it continues. Yesterday I showed the S&P 500 bouncing off its 200-day line. Today, the S&P 500 SPDRs are trading at the highest level in two weeks.

Chart 7

Chart 8

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