MAY 26 INDEX UPDATE
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Short-term technical readings:
DOW - CLASS 2 BUY(again)
SPX - lower midrange/borderline oversold
OEX - lower midrange/borderline oversold
NAZ - lower midrange
NDX - lower midrange
VIX - 28.32, lower midrange(inverse to market)
5-DAY TRIN - 6.15
CBOE PUT:CALL RATIO - .56
Since the DOW did not close at/near the intraday lows, my short-term technicals only gave
a CLASS 2 BUY SIGNAL again. One of the more important issues today was that the DOW
produced a LOWER LOW.
If the market continues down there is 1-2 more downside days before I would get a CLASS 1
BUY signal for the overall market. Interesting that such is now lining up with my cycle
analysis which was calling for some sort of a bottom on FRI/TUE(MAY 26/30) per previous
updates.
With the VIX only at 28.32 and the PUT:CALL RATIO at .56 - sorry but these indicators are
not showing alot of fear, just complacency.
As mentioned in yesterdays index update, I was somewhat bearish and stated that I would
not be surprised to see ZIG-ZAGs today, even though I was more inclined that the rally
would continued. BOY - what a ZIG-ZAG.
Since the overall market was unable to follow-thru with the rally that started on WED -
simply put, thats a sign of weakness, not just a lack of strength. And with todays
performance I became a little more bearish. I wont turn full-blast bearish until the
SPX breaks below 1340, but Im starting to get close.
I was speaking to LEE, and we were making a comparison of this decline with previous
BULL MARKET RUNs. During those strong BULL MARKET RUNs in the past, when a decline occured
it only lasted a short-period of time and the DOW would sell off 200 point or less. There
was once when I got a CLASS 1 SELL signal and the DOW only sold off 75 points intraday, only to resume the uptrend. Could it be that same thing may be occuring but in reverse, to the DOWNSIDE.
Thats a scarey thought.
With todays performance, I am also more comfortable with my belief of, at least, a retest of
the recent lows in the NAZ 3042. With so many saying the the 2900-3000 region will hold,
I just keep on thinking of the old belief that the market moves where most least expect it too.
Therefore, on a subjective basis I would not be surprised if the 2900-3000 region did not
hold.
Seeya |
