Welcome to the recap of Monday's MarketWatchers LIVE show, your antidote for CNBC lunchtime talking heads. Listen and watch a show devoted to technical analysis of the stock market.
Information abounds in our Monday/Wednesday/Friday 12:00p - 1:30p shows, but we will try to incorporate a few charts that you found the most interesting during the show (or that we found most interesting!). Your comments, questions and suggestions are welcome. Our Twitter handle is @MktWatchersLIVE, Email is firstname.lastname@example.org and our Facebook page is up and running so "like" it at MarketWatchers LIVE.
What Happened Today?
Monday Set-Ups: Every Monday, Tom and Erin look at which charts are shaping up as "ones to watch" for the week. Tom's charts included Acco Brands (ACCO):
Erin ran one of her PMO Scans (you'll find one of her scans here) to find interesting Monday Set-Ups. Her favorite chart today (and one that Tom liked too):
Northrup Grumman (NOC) has an appealing chart. We got a nice breakout from the bearish descending triangle. I like to see a bullish conclusion to a bearish pattern as I find that to be especially bullish. Combine that with a new PMO BUY signal and an improving SCTR and this one has possibilities in the short term for a move to $252.50 if it can beat its February high.
Indicators/Sentiment/Polls: On Mondays Erin reviews the latest sentiment charts, reviews our polls and reviews DecisionPoint indicator charts in ultra-short term, short term and intermediate terms to prepare you for the week.
This weekend's Twitter poll showed that 46% of viewers believe the market will close higher on the week. Erin and Tom are leaning bearish. We'll see who's right!
Of particular interest to both Tom and Erin was the high readings on the VIX. Tom pointed out that this could be looked at as bearish given the increased fear in the market as referenced by a higher VIX reading. Erin discussed how these extremes can be considered either "initiations" (as Tom sees it right now) or "exhaustions". Erin looks at this recent close and penetration of the lower Bollinger Band on an inverted VIX generally comes across as an exhaustion. Based on the current downtrend, and climactic breadth readings, she's looking for a small rally "pop" out of this exhaustion in the next day or two.
Market Updates: Erin reviews the intraday action of the major indexes, sectors and the "Big Four", (Dollar, Gold, Oil & Bonds). For complete updates on the market and indicators, read the "DP Alerts" in the DecisionPoint blog.
Today we watched whether the Dow and others would be able to break above declining tops line resistance and hold onto it. At the beginning of the day, it wasn't clear if the rally would continue past broken resistance, but at the close the Dow moved even higher.
Ten in Ten Before 1: In this regular segment, Tom reviews ten charts in ten minutes, followed by Erin's comments and comments from the Twitter "peanut gallery". Send in your symbol requests via Twitter (@mktwatcherslive) before the show and we'll try and add them. Tom started off with KB Homes (KBH). KBH, while breaking out on nice volume, Tom pointed out that the reward to risk on this trade isn't great given the negative divergence present on the MACD.
Mailbag Segment: Each show Erin and Tom answer questions received via Twitter, Facebook and Email. One of today's questions was the use of Fibonacci retracements. While neither Tom or Erin use this tool regularly, Tom showed how you can use it on the Charting Workbench annotations. Interestingly, the symbol request for Braskam SA (BAK) showed the usefulness of the tool as price support/resistance lined up nicely:
It's a Wrap! In closing, Tom and Erin are leaning bearish for the week, but neither believes this is going to be a corrective move...yet.
Tune in on Wednesday at 12:00p - 1:30p EST on 4/19. Erin will announce the results of the latest Twitter poll. Tom and Erin will be answering more mailbag questions, doing another Ten in Ten segment as well as regular market updates and indicator reviews!