Also, from TraderNick on DP:
In my Thursday night update I remarked: "We have a couple of important dates bearing down on us. One's tomorrow, when the latest employment numbers are released. Another is Dec. 6th, when we hit a Fibonacci time line."
As we now know, the first touched off an explosive rally. The second comes early next week. Monday is a Fibonacci series potential turn day (counting from the Oct. 18 low) for all three major market indexes. And from last week's serendipitously timed tutorial on Fibonacci fan and time lines, you now know what SHOULD transpire. There are no guarantees in technical analysis, of course, but the indexes should put in a ST top next week. Tuesday, Pearl Harbor Day, is also when a favorable short term seasonality period comes to an end.
Supporting our cautionary stance is the fact that the VIX (Volatility Index), an inverse indicator, is sporting a low raw number reading of 20.81 and, more important, is below the bottom line of its ST regression channel. It's also interesting to note that the VIX is sitting on a Fibonacci time line of its very own, one measured from the Oct. 15 high of 35.48.
All this suggests that the Nasdaq, particularly the obscenely overextended internet sector, is an accident waiting to happen. While the tech stocks (which are overbought, at the top of their ST regression channels, blah, blah, blah) are most at risk of major profit taking, and while I anticipate a time of reckoning for them, there are other areas of the market that actually managed to work off a bit of their overbought condition during the minor correction we saw early last week. There is a chance that the Dow and S&P may manage to hold up relatively well in the event of a Nasdaq selloff. The odds still say that the broad market will correct along with the techs, but we could witness a transfer of money from the riskiest stocks to those not blessed with a hot "story" or a day trading clientele.
re: specialist and member shorting
Unless it's the nifty twenty stocks being shorted, it may not be much use in this market. I've found advance/decline indicators to run counter this year also. The same market gauge has the NYSE and Nasdaq A/D oscillator moving in different directions. |
