Gersh; RE:" MID.X -- Bear Flag ? "
>Shows how much of the gains in the last couple of weeks have been concentrated within just a few issues. Tom Dorsey & Co have issued some sort of 'bear confirmed' notice based on lack of breadth of the market...
...using breadth as his measure, he is right: during the month of January, TECH went up in record fashion, but NF.X - Financials, RLX.X - Retail, and DRG.X - Drugz sectors all decayed or, simply tread water w.r.t. the S&P, which was essentially pulled along by TECH and Telco's (and not much else) IMHO that is why MID.X is important for us to be aware of right now.
>Looks like it's set to bounce off support from the July peak .. but .. it sure has been just setting on that line (375) for a while...
...6 days in a row, it has been testing that apparent support, Gersh - looks like six old crows sitting on a telephone wire smoking cigars in some old Tex Avery cartoon (^_^)
>This one could drop through. If it does then next support ~355 then 335 then 280-285 area. 50 and 200 ema will also provide good supports...
...from 375, I reckon the 50d EMA will be ~368 +/-3 perceived support; then ~360 is the next level, with the 200d EMA coming into play at around the ~345 +/-5 area. Below 340, Gersh - we're talkin' about a total breakdown of the market.
>Bear flag ?
...yes! it looks like a Descending Triangle, just the opposite of the Ascending Triangle that DJ was talking about on CSCO.
>Looks a lot like the MDY chart...
hmmm... MDY being more a reflection of derivatives rather than the raw index; I just put MDY up for ya too, for comparison.
geocities.com
What's different on MDY is that the Descending Triangle looks more like a Pennant, (where the perceived base is sloping downward, rather than flat; and the left edge is not a right angle), though it is damn hard to tell (and I haven't used classic geometry T/A since I was a teenager ;-) Whereas a Descending Right-Triangle is BEARISH -- a Pennant is BULLISH.
To be sure, if MDY breaks down from ~70, ~67 would be its likely destination. But I don't think it will; I think it's going to ~75 !
...insofar as the MID.X index is concerned, I cannot imagine a more perfect set-up for a 2:1 or 3:2 bullish CALL Ratio BackSpread than right here, right now (if I could sell naked index CALLs) - or even a 1:1 Long Straddle from ~375 -- for one thing is certain: those crows ain't gonna sit on that wire smokin' cigars for long !
-Steve
P.S. Denver wins SuperBowl = Bear Market, right? (^_^) |
