Weekly Stock Market & Sector Technical Anlaysis - 10-19-08

Weekly Stock Market & Sector Technical Anlaysis – 10-19-08

On October 20, 2008, In Market Updates, Technical Analysis, by Steve Warshaw

S&P 500 Trend:

Smart Scan Chart Analysis continues negative longer term. Look for this market to remain weak. Strong Downtrend with money management stops. A triangle indicates the presence of a very strong trend that is being driven by strong forces and insiders.

Based on a pre-defined weighted trend formula for chart analysis, INX scored -90 on a scale from -100 (strong downtrend) to +100 (strong uptrend): Strong Downtrend

	+10		Last Hour Close Above 5 Hour Moving Average
	-15		New 3 Day Low on Thursday
	-20		Last Price Below 20 Day Moving Average
	-25		New 3 Week Low, Week Ending October 11th
	-30		New 3 Month Low in October

-90		Total Score

S&P Trend Analysis Provided By Market Club Trend Analysis

The first chart is the XLB – Materials Sector

There isn’t much good news for materials, unless of course your business needs them. The XLB is sitting right on a major support line, but the OBV is showing an acceleration in selling here, and the PPO isn’t showing any signs of bottoming signal which would indicate some kind of change in direction.

Until we see volume taper off and the indicators turn around, the outlook on XLB is down.

XLB Weekly

materials sector weekly chart technical analysis - click to enlarge

XLB Daily

Materials Sector Technical Analysis - Click To Enlarge

Next we have the financials.

Everything about this sector is ugly, including the massive volatilty (unless you write options), and the uncertainty in the news. One thing is certain however, the trend is down, and anything but a swing trade should not be considered on the long side.

XLF Weekly

financials weekly technical analysis - click to enlarge

XLF Daily

Financial Sector Daily Chart

Energy is next,

And what a wreck for the bulls. There is absolutely nothing bullish in the long, medium, and short term charts. A long term bearish divergence is just now playing itself out in the PPO, and the ADX is showing the down trend as strengthening.

XLE Monthly

energy sector - monthly chart - click to enlarge

Each of the following sectors are very similar to energy:

Industrials, tech,health care, and consumer discretionary.

The one sector that has held up best against this crazy market, predicably, is:

Consumer Staples.

The XLP has found very strong supprt at $24.31 which conicides with the 50% retracement level, and looks like it may hold as a bottom. Consumer staples is the only monthly chart still in a long term bullish condition.

XLP – Monthly