A quick assessment of North American markets

Nasdaq- see chart above

The Nasdaq is still on-trend. Its testing its trendline right now, and is above its 200 day (40 week) MA which lies around 4300. Momentum indicators are approaching oversold but have not begun to hook up. We’re a few days or more from the bottom. The trendline may be breached – more than a few days is bearish, particularly if the prior low of 4300 (where the 200 day MA comes in) is breached. It’s too early to draw any bearish conclusions. So far, this correction has been a needed, healthy movement.

S&P 500- see chart above

Here’s the S&P500 chart I posted on my “Action plan” blog last week. The lower trendline has been breached. I noted on that blog that if 1960 didn’t hold, we are looking at a potential drop of 1900-1930. Thursday, as I write this around lunchtime, the S&P is playing with 1930. It is vital that the 1900 level –which represents the last “low” – holds to maintain the bigger uptrend. Seasonality turns positive in the middle of October – watch for a rally off of the low levels at that point. No rally and a break of 1900 would be bearish.

TSX 300- see chart above

First level of support has been breached – as noted on my “Action Plan” blog. Be warned: A one-day spike below lesser support is not a movement to trade off of. Bigger, and much more significant support comes in at the old breakout point from 2011 – this comes in around 14,250. A break of that level would inspire a more bearish prognosis.  As noted in the past, I’m less optimistic about the fortunes of the TSX, given our resource-bias. At ValueTrend, we do hold Canadian stocks, but very little in the resource sector. We continue to largely focus on US stocks at this time.

Upcoming speaking events with Keith Richards: please note the time change to 3:30 PM at the MoneyShow (was 5:30 PM)

Brantford Public Library: Thursday October 9th, 2014. 7:00PM. Technical analysis concepts from the book Sideways are discussed – come out and join the discussion!

Toronto MoneyShow: Metro Convention Ctr. Thursday October 16, 2014. 3:30PM.