Health Care Top?
by Carl Swenlin
April 9, 2010
(This is a reprint from yesterday's blog for Decision Point subscribers.)
I have wondered how the Obamacare bill is going to affect the Health Care industry in general. I would hate to be an executive in that industry trying to decide which way to jump. Not only does one have to sort out the complexities of the bill, but the possibility of the bill being repealed (or partially repealed) by the next congress makes planning an impossibility.
One thing of which I am certain is that the market will figure things out first, and the conclusions will be evident in the charts.
To take a closer look, I have chosen a weekly chart of the Rydex equal-weighted version of the Health Care SPDR. We can see that prices recently made new all-time highs, but that the PMO has formed a negative divergence. Most significant is that the most recent PMO top has formed below its 10-EMA. On that basis, I'd have to say that the outlook is not positive.
Along the lines of my initial remarks, I must say that the chart does not reveal anything specifically prescient regarding the Health Care sector. This sector looks pretty much like the market in general, which is overbought and acting toppy.
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Technical analysis is a windsock, not a crystal ball.
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#18 Bond Timer (*TD Index: 87.7 Vs. Bonds 83.86)
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2008 TIMER DIGEST RANKINGS FOR DECISION POINT
#17 Intermediate-Term Stocks (52-Weeks) (TD Index 111.9 Vs. SPX 61.51)
#4 Bond Timer (*TD Index: 112.32 Vs. Bonds 118.26)
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#9 Long-Term Timer (2 Years) Stocks (TD Index: 132.35 Vs. SPX 63.69)
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#2 Long-Term Timer (5 Years) Stocks (TD Index: 168.82 Vs. SPX 81.23)
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2007 TIMER DIGEST RANKINGS FOR DECISION POINT
#40 Intermediate-Term Stocks (52-Weeks) (TD Index 91.9 Vs. SPX 103.28)
#5 Bond Timer (TD Index: 105.85 Bonds 104.39)
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2006 TIMER DIGEST RANKINGS FOR DECISION POINT
#11 Intermediate-Term Stocks (52-Weeks) (TD Index 111.3 Vs. SPX 113.6)
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2000 TIMER DIGEST GOLD TIMER of the YEAR
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BIO: Carl Swenlin is a self-taught technical analyst, who has been involved in market analysis since 1981. A pioneer in the creation of online technical resources, he is president and founder of DecisionPoint.com, a premier technical analysis website specializing in stock market indicators, charting, and focused research reports. Mr. Swenlin is a Member of the Market Technicians Association.
