OCT 17 INDEX UPDATE
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Short-term technical readings:
DOW - lower midrange
SPX - midrange
OEX - midrange
NAZ - borderline upper midrange
NDX - borderline upper midrange
VIX - midrange
CBOE PUT:CALL - .64
Per my short-term technicals the overall market is now in the MIDRANGE, which I refer to as the "flip-of-the-coin" territory. Basicly, the potential upside and potential downside are about the same.
We have the possibility of a 3-DAY PATTERN, where today is DAY-3 and could be up strong, similar to DAY-1. However, late yesterday afternoon the SOX showed significant weakness, mainly due to the NVLS issue, and closed at its intraday lows. As mentioned often I use the SOX as a leading indicator for the NAZ/NDX, so per yesterdays performance in the SOX, it implies that the rally in the NAZ/NDX may weaken.
So I had 2 conflicting issues between the 3-DAY PATTERN(bullish for today specificly) and the weakness in the SOX(bearish). So which one will stand out.
Personally, since I was biased to the upside in the mutual fund, I decided to play it safe and made my position even, so I no longer have a bias in either direction, and am now 80% cash. So as for todays direction in the market - heck if I know, so Im playing it safe/ conservative.
Yesterdays performance in the NAZ/NDX lacked the follow-thru, but frankly I am not making that much of an issue, since it is common that the day after a huge runup turns out to be flat. However if today is flat again, or worse if negative, then that would be a clue that the legs on this rally may be weakening. Im less inclined to call it a base formation since per my short-term techncials bases normally start to form in the overbought or oversold regions, not while in the midrange.
Heard on CNBC this morning about the downgrade in MU. I forget the name of the analyst, but CNBC was mentioning that this analyst previously had a target of 100+, which was made when MU was around 80. Now that same analyst downgrades MU when MU is now around 34. So where was this analyst between 80 and 34 - thata 46 points where many did actually lose. Yes I know that MU is about the same level as about a year ago, so those who got in over a year ago are still OK - but tell that to the many who bought MU above the 50-60 range, and there were plenty. When a stock is moving up strong, its really not hard to increase ones target playing the momentum - ANYONE CAN DO THAT! Whats hard to do is to preserve the gains/get out. |
