With the 8000 support level succumbing to downward pressure, the bottom targets for all 3 major indicies has to be revised downward. In my article "When Will the S&P 500 and Dow Jones Bear Market Hit Bottom?," I made the predication that the bottom would come around May, 2009. I made that prediction with the belief that the S&P 500 would hold at the 800 level, and the DOW would hold at 800. With these critical levels looking to be broken on the weekly chart, it is time to figure out new levels of support for the bottom.

Check out the video: "How Low Can the Dow Go?"

First I took a  look at the trend for the DOW. Clearly the trend is down, but we want to figure out whether or not it is going to continue. There is a very bearish signal showing on the accumulation / distrubution where the line crosses below a 26 week moving average. This is the first time in over 5 years that any cross of this line has occurred. Second, the ADX is showing the down trend gaining strength. Any reading above 25 is considered a strong signal

Trend:

Price Target

So whats the price target. The chart is showing that we broke to the downside of a continuation triangle. The top of the triangle to the bottom is approximately 1300 pts. 1300 points below the the bottom of the triangle at 8000 puts us in around 6700 on the DOW. So the projection is 6600 - 6700.

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Posted on Friday, 21st November 2008 by Steve Warshaw

Tags: analysis, beark, bottom, djia, dow, dow jones, techincal anlaysis, trend, video
Posted in Market Updates, Technical Analysis | Comments (0)

I was looking over several charts this past weekend and I was shocked to recognize a chart formation playing out before my very eyes. I’ve seen this same formation a million times before, but I just didn’t want to believe it could be happening to my favorite stock, Apple (NASDAQ_AAPL). Some would call this denial.

Several months ago I discovered a major technical formation that spelled trouble for Apple. I have to admit that I was saddened by this. This formation was also picked up by our "Trade Triangle" technology. Our algorithm triggered a sell signal and has continued to suggest a short position for Apple all this time.

Watch my new video on Apple.

I was surprised that we’ve seen this market come down so easily. It seems like every time I visit an Apple store they are always busy and their products always seem to be selling well.

The question is, are we at the end of the iPod era?

Given the chart formation, the double top and pivot point, it seems we are headed lower. The Pivot Point measures down to the $40-$50 range and Apple at $90 still has a long way to go on the downside.

What caught my eye this weekend was a weekly continuation pattern to the downside and the fact that Apple closed at a new weekly low for the year. This is not a bullish sign by any stretch of the imagination.

For this coming week, I expect to see further downside pressure on Apple. I believe that we are going to be looking at the $50-60 dollar range as our target zone. Of course everything within will be tempered by our "Trade Triangle" technology. When our short-term "Trade Triangle" turns positive, we will close out short positions and take to the sidelines. In my opinion, it’s going to take some time for this market to improve and turn around. The technicals are just too weak at the moment.

Here’s the video, check it out

Posted on Tuesday, 18th November 2008 by Steve Warshaw

Tags: aapl, appl, apple, pattern, short, stock pick, Technical
Posted in Stock Picks & Tips, Technical Analysis | Comments (0)

In the process of creating videos for my new eBook, I came across a killer short pick: Comcast.

Technical Analysis

The first thing I noticed about the daily chart is that today formed a very large bearish engulfing candlestick pattern. Second is that there is huge divergence with the Accumulation / Distribution indicator. Third, there is significant divergence in the RSI. Fourth is that the Williams %r is flashing a new sell signal. Finally, price today broke a recent uptrend line at $17. When you combine a leading indicator such as accumulation / distribution showing divergence with a bearish candlestick pattern, this is a reliable sell / short signal. Finally, the 50 day moving average has acted as strong overhead resistance providing a clear stop with minimal risk.

Current Price - $16.65
Resistance 1 - $15.93
Resistance 2 - $15.27
Target - $13.17
Stop - $17.96 (Current 50 day ma)

Posted on Tuesday, 11th November 2008 by Steve Warshaw

Tags: bearish, cmcsa, comcast, short
Posted in Stock Picks & Tips, Technical Analysis | Comments (0)