Market Analysis for Nov 1st, 2005
The most salient feature of the SMH right here is the juxtaposition
of the price structure with a host of very important moving averages.
Let's notice that the SMH is trading below all of the enclosed MA's,
with the 20 and 50 DMA's angled sharply to the downside. In addition,
the dominant near term resistance line cuts across the price axis
at around 34.10, which put a lid on the Fri.-Mon. recovery rally from
32.57 to 33.94. Clearly, if the SMH is to reverse its Aug.-Oct. slide,
it must initially hurdle and sustain above the steep negative trendline
at 34.10, and then claw its way above 35.00 to trigger significant buy signals. Barring a hurdle of the near term
resistance line, my work points still lower- at least for
additional probing of the Oct. low area between 33.00
and 32.50-- which if viiolated, will point to downside
acceleration into the area of the intermediate term (14 month)
support line, which cuts across the price axis at 31.80.
MJP 11/01/05 Noon ET (33.38)
For more of Mike Paulenoff, sign up for a FREE 15-Day Trial to his E-Mini/Index Futures diary. Or try his QQQ Trading Diary, or his Macro Trading Charts.