INDEX UPDATE
-----------------------------
With todays action, the overall market is in the upper mid-range approaching overbought already, but that does not really mean that much since the market can still move up strongly while in the overbought region as we have seen since JAN.
Although the point drop was not huge (300 on the DOW), technically it was a strong correction which have damaged some of the technicals and will show up further down the road.
Can some of the indexes set new highs now - I think yes, but not all of the indexes. I do not think that we are heading for 10000 right now, not to say it could not happen later in the year. For the time being I have technical hints that we have entered a range trading trend, not an up or down trend, and that the trend is in the 8750-9300 range on the DOW. 9200 will be a tougher resistance line than most BULLS will want to believe, not to say it cant be pierced but just saying it wont be easy.
For the immediate future, it appears that news items concerning interest rates will be playing a bigger role than it did during the strong runup phase. If the NAMP news is bad, there should be a dip and that should be taken as a buying opportunitiy to the upside, with a conservative upside target of 9150-9200 for the immediate short-term(5days). If the NAMP numbers are good, we will be heading straight to the 9200 range and testing that resistance line.
With the damage to some technicals, I believe that a bigger pullback will occur soon and should occur towards mid/end MAY. However, please keep in mind that interest rates will also have alot to do with the size of the next pullback.
Seeya |
