3/1 Watchlist

The blue-chip stocks (SPY) have peaked today at $112, or 0.4% above the previous near-term peak on Feb. 22.

In terms of prices, the pattern has turned ambiguous. It can be seen as a lower high (if prices were to turn down from the $112 level on the daily chart), a continuation of a downtrend.

Or the price could continue up to above the next high, $115.14 set on Jan. 14, in which case a correction of six weeks or so has come to an end and SPY in the uptrend that began in March 2009.

The lower high and thus the downtrend will be confirmed if the price moves almost immediately down toward a lower low (below $104.58). The uptrend will be confirmed on a push above $115.14. In the downtrend case, today's higher high was just a small overshot. A case of irrational exuberance, some might say. So, I can choose to sing "Happy Days Are Here Again" (if I'm a bull) or to sadly hum the "Death March from Saul". Some of the technical indicators support the downtrend case. The money flow index is bumping along just below the 80-line. A push above the 80 puts the mfi into oversold territory. The fast stochastic (sto) shows both the %K and %D lines above 80, an oversold condition.

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So you pay your money and you take your choice. My gut tells me that the downtrend case is stronger, but it could also be a mild case of indigestion.

But Person's Proprietary Signal (pps) shows a bull signal from this morning, and the Parabolic Stop and Reversal (psar) has been in bull mode since Feb. 11.

Treasury long-term bond prices (TLT) are trading in a very narrow range just below Friday's open.

The emerging markets exchange-traded fund (EEM) has gapped to levels last seen a week ago, with a new pps bull signal. Also, bullish the macd and psar. The stochastic %K line has moved into overbough territory, but not the %D line. The mfi is floating in the neutral zone.

Oil (USO) has fallen sharply today, traversing 2.9% high to low. The decline started above Friday's high point, and the price has pulled back a bit from today's low point, putting it almost exactly on a level with Friday's open.

The watchlist. (I added nothing in this morning's scan. It was all just too dismal for words.)

Macd bull signal:

• AOD, analysis. No price move yet.
• BSX, analysis.No price move yet.
• F, analysis. Broke out of its range today with an upward move traversing 5.1% low to high. The move was proceeded by bull signals on the macd, pps and psar. The sto moved into overbought territory before the move -- bad signal, that one -- and the money flow index was in the neutral zone.
• WFC, analysis. No breakout.

Macd bear signal:

• XHB, analysis. Continued to rise today. I sold my bear position this morning when it hit the stop/loss. The psar gave a bull signal on Feb. 12. The pps only gave one this morning. The macd, on which I predicated my bear trade, gave a bear signal that proved to be ghost signal.  Before the move the stochastic and money flow index were in their respective neutral zones.  I'm removing XHB from the watchlist.

(By the way, a psychological test: When you read the term "neutral zone", do you think of a) American football? b) Ice hockey? c) Bycycle racing? d) Klingons and Romulans? If you answer d), then you are a true Trekkie and a kindred spirit. Live long and prosper.)

Money-flow index overbought (bear signal):

• CSCO, analysis. Broke above the trading range in a weak, 1.4% low to high move, which has pulled back a bit. Removing from the list -- it moved the wrong way.
• SBUX, analysis. Broke above the trading range in a 1.9% move low to high. Removing, a wrong way move.
• SMH, analyses 1, 2. Broke above the range with a 1.8% low to high move. The psar gave an ugly whipsaw on this: New bear signal on Feb. 25-26, and a new bull signal today. The pps proved to be a perfect predictor of old news, showing a bull signal only today. Removing. Wrong direction.
• TXN, analyses 1, 2. No breakout.
• XRT, analysis. Sharp rise, 2.2% low to high. Removing from the list.

Money-flow index oversold (bull signal):

• UNG, analysis. Sharp 4% decline. Removing from the Wathlist.

So, practically everything moved the wrong way.  A watchlist disaster, so to speak.

From this I conclude

1. The mfi and macd are bad signals when used by themselves. 
2. The psar gave mainly good signals, but when it was wrong, it was pretty spectacular.
3. The pps gave mixed results.
4. I've not been tracking the stochastic until weak, so the court is still out.

As a way forward, I'm thinking to first look at the psar, and then interpret that in light of the mfi, macd and stochastic as future trend indicators, and then make a final judgement based on the price trend and support/resistance levels, that last being the best analytical tool in my book.

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Topics:
S&P 500, SPDR, Spiders, Treasury bonds, Alpine Total Dynamic Dividend fund, Boston Scientific medical devices health, Cisco networking, Ford Motor automotive, Starbucks coffee, Semiconductor HOLDR, Texas Instruments semiconductors, Wells Fargo bank financial, homebuilders retailers, natural gas.