Hi,
Was unable to post yesterday, but I did get a CLASS 2 SELL signal which could morph into a CLASs 1 or start reversing now and implying that we are near some sort of a short-term(1-5 days) again.
Previously I mentioned that I felt that most likely we are in a trading range, without a huge downside or a huge upside and that if there are NEW HIGHs it would be limited to only some sectors and not the overall market, just more sector rotation.
Just a week or so ago we had quite a few bears with some calling for doomish readings, and with the DOW setting new highs yesterday we now have the opposite which is normal. I was not around yesterday, but I heard that CNBC had someone on who was saying that the DOW should be at 36,000 now.
The DOW set a new high yesterday, which is strong positive, but I have to wonder if this may just be a replay of last APRIL when the DOW ran up so hard and the rest of the market was flat, then it was the NAZ turn to run up hard in JULY while the rest of the market was flat. For the DOW, SPX, NAZ - they have not really gone anywhere since APRIL, so is this a breakout or just continuance of the trading range. Im still inclined that it is just a continuance of the trading range with a few sector or even just 1 setting new highs, and with a few or just 1 sector setting new lows.
EDIT: Please keep in mind that the DOW ran up about 1000 points in APRIL while the rest of the market remained flat, and if I recalled correctly the NAZ had an approximate 10% pullback at the same time the DOW ran up 1000 points.
The NAZ and the SPX are firmly at the top end of the FIBINOCCI retracement from the recent pullback, so at this moment there is no confirmation of a breakout of this trading range to the upside.
Lets look at the some of the other broader indices like the RUT,NYSE,MDY,VGY. THEY are still only up about 50% of the recent pullback.
So the DOW sets new highs at the expense of the most of the other indices, so far. Sound familiar?
The MARKET INTERNALs have improved somewhat but not alot. The NEW HIGHs for the 1st time in a few weeks out numbered the NEW LOWs which is a positive, but the NEW LOWs are still high at 74. Not that I am one to set numbers but many feel that 40 is the key number for the NEW LOWs to stay below. I mentioned previously to James Strauss that this improvement could just be a pocket of improvement prior to another short-term period of selling. Take a look at the following chart of the 10-DMA HIGH/LOW DIFFERENTIAL, which is at the bottom. It is interesting to note that it just previously produced a LOWER LOW.
decisionpoint.com
Prior to the DOW setting a NEW HIGH, please keep in mind that there have been important LOWER LOWs also produced in some sectors like the DOT.X. Is it possible that NEW HIGHs and LOWER LOWs in a few sectors will offset each other while the the majority of the INDICES are still range trading?
Previously I had also mentioned that per not SHORT-TERM CYCLE ANALYSIS, which is seperate/different from my CLASS SELL signals, there should be a short-term top around/near AUG 23. Last week I got a CLASS ' SELL signal towards the middle of the week and the market pulled back 1 days and ran hard from there, and now I am getting another CLASS SELL signal for today, although it is only a CLASS 2, which could morph into a CLASS by tomorrow.
seeya |
