MAR 4 INDEX UPDATE
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Per my short-term technicals, the NAZ/NDX is 1-2 days from another CLASS 1 BUY signal if the market continues down.
I saw 2 positives for the NAZ/NDX on FRIDAY:
1) SOX continued up with the BULLISH ENGULFING PATTERN the day before
2) NAZ net NEW HIGHs/LOWs improved on a down day. It was around negative 160 on Thur, and on FRI it improved to neg 101. Keep in mind that the in DEC it was around negative 900.
Another possible positive I notice but requires further confirmation, so I did say possible. They rate of decline may be slowing. If checked from a daily perspective from the JAN highs of 2771(NDX) till now the rate of decline appears to be similar from the SEPT top. But just from the perspective of comparing troughs, in the 2 month since the early JAN lows of 2087(NDX), the NDX has so far only dropped 250 points. The troughs from SEPT-DEC were dropping at the rate of about 400 NDX points per month. Of course, it needs further confirmation since the NDX could just tank from here and the rate of change measureed by the troughs could intensify.
The NDX is only about 350 points from the next strong support area of 1500-1400, and eventually we may still see those prices, but for the short-term I am suspecting that we first bounce. I am not expecting a strong bounce. One senerio is a bounce back to the 2050-2300 region on the NDX, then another retest of the new lows. I think it is less likely that we tank right now.
Previously, I had also mentioned what I felt was the maximum lows would be the OCT 1998 lows at 1063 - I did not say it would definitely get that low. For the NDX to get that low I suspect that the BTK and RUT and SOX would have to breakdown majorly. So far the SOX has bounce off an important support at 516 and the BTK is holding up so-so. The RUT was up on FRI when the NDX was down. So the BTK/SOX/RUT are not yet showing signs of an IMMEDIATE collapse.
So if I am correct that the ABSOLUTE LOW in the NDX is 1063, then the NDX is definitely closer to a low than the high, since thats less than 800 points to the downside and about 3000 to the upside. Just trying to put things into perspective in light of growing negative sentiment.
A for my personal IRA account I have been adding long positions, and added somewhat aggressively on FRIDAY(UOPIX) to where I am now only about 55% cash, keeping in mind that I was only about 85% cash prior to that. If the NDX contiues down I will continue to add and if it does drop to the 1400-1500 region without bouncing, I will then be close to fully invested. I will be in deep do-do if the NDX drops to 500, but can still weather an immediate storm to 1063, which I think is unlikely right now/immediately/tomorrow-next week). I didnt say it was impossible down the road, just not right now. If a bounce does start, my strategy is to start hedging/take profits in the 2050-2300 region in preparation for another retest, but will of course reevaulate once the NDX does get back to the 2050-2300 region.
EDIT: For the very short-term the key to watch on the NDX is whether THUR's lows at 1838 can hold. If pierced to the downside intraday, that would be a hint that it is heading lower before the bounce
Have to make it short and will not be able to post much for awhile since my mother was hospitalize again |
