MAY 24 INDEX UPDATE
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Just want to expand on some of the issues mentioned in the MAY 23 update.
On a subjective basis I am hearing that the bottom for the NAZ is in the 2900-3000 range, and the analyst from MERRIL was saying that also on CNBC. On SI, I also see alot of mention of 2900-3000, so for the time being it appears to be the consensus. Every J6P I spoke to yesterday after the close are also saying 2900-3000. I too see strong support at 2900.
Frankly that bothers me. I dont like so many being in agreement with me, Im use to being some sort of a contrarian. gggggggggggg
On a serious note, the contrarian positions are either that the NAZ does not visit the 2900-3000 and rallys right from here, or the NAZ breaks below 2900-3000.
I do have CLASS 1 & CLASS 2 BUY signals across the board so we should see some sort of a bounce in the THUR/FRI timeframe, and it could start as early as today. But will it last.
What really bothers me about the NAZ 2900-3000 bottom, besides so many being in agreement, is that there is still NO strong sign of fear/capitulation.
As mentioned in the INDEX UPDATE, the CBOE PUT:CALL ratio surprised me when it actually declined to .48 - SORRY, but thats not a sign of fear. The VIX closed at 29.58 - thats also no sign of FEAR.
The NAZ closed at 3164, so the NAZ is already close to that consensus bottom of 2900-3000. Dont get me wrong, I still feel that we will get a short-term bounce but Im not as confident as I was before that the 2900-3000 region will hold down the road. Again Im not saying that the NAZ breaks below 2900-3000 immediately, just that we may be testing this support area more than once.
So here's a possibility - We get a bit closer to the 2900-3000 region and bounce into next week; thereafter around the 2nd week of JUNE another retest of the 2900-3000 with the possibility that it may break to the downside.
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