CSCO was recently added to the Dow 30. Based on the behavior of past stocks that have been added to the Dow, this does not bode well for the stock. We can now see a clear 5 wave pattern up since the May 26 low. At the least, a pullback to the .618 retracement of the move near the 200dema is expected. If the 5 waves are wave c of an upward flat correction, then a retest of the May lows is expected. Either way, CSCO should have one move leg up after the correction is over.
A number of other Dow stocks appear to have completed patterns, which supports the expectation of a near term correction.
In the Nasdaq 100, AAPL and GOOG look like they need one more up move to complete their recent advances, while AMZN and RIMM look as though they are ready to roll over.
All in all, the case for a correction is building. Of course, all of these patterns can be blown to smithereens if the broader markets breakout solidly above the recent consolidation, but it looks like the weight of the evidence is still pointing down.
2 comments:
Btw, there's been a lot of erroneous citing (reporting) of GC's in the media, e.g., CNBC's Art Cashin IMO because they're using simple MA's instead of exponential MA's.
Hourly index charts look like a "rave" which i'm too old for. Craig, your sons can probably explain a "rave" to you, if necessary.
Regards,
dave
Dave,
I agree. The simple moving averages are not an accurate reflection of market action and should not be used in most circumstances.
The hourly charts show the inability of the bulls to break the market out. The buying power from the initial thrust is spent.
BTW, if I find one of my sons at a rave, it will be the last time. I guess I am showing my age.
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