JUNE 15 INDEX UPDATE
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SHORT-TERM TECHNICAL READINGS:
DOW - midrange
SPX - upper midrange
OEX - upper midrange
NAZ - midrange
NDX - midrange
VIX - 24.51, lower midrange. turned upwards, still within parameters of BEARISH WEDGE
CBOE PUT:CALL RATIO - .57
5-DAY TRIN - 5.92
The overall market is back in the MIDRANGE, with a slight downward bias.
The main formation I am noticing is the RECTANGLE on the NAZ and NDX. Its quite obvious that the intraday highs for the past 9 days have been within a few points, forming a STAIRSTEP. Going back to the summer of 1998 we had similar STAIRSTEPs during the selloff. However, there is a difference. Those STAIRSTEPS were formed during a short-term decline, while this one was formed during a short-term uptrend. RECTANGLES are similar to TRIANGLEs since they should be resolved in the direction of the trend. The trend(short-term) is up. However, I would not be overly confident that this RECTANGLE will break to the upside, in light of significant negatives in the market such as market sentiment (VIX/ PUT:CALL RATIO/ RYDEX INDICATOR).
Another important formation is the DESCENDING TRIANGLE in the DOW, which is still valid. DESCENDING TRIANGLE normally break to the downside.
The BEARISH WEDGE in the VIX is still valid and the UPPER TRENDLINE of this wedge is approx. 25.5 fpr tomorrow. The VIX closed at 24.51 which is only a point away, so I feel it would be important to watch carefully for a break of that upper trendline, which would be bearish for the overall market.
The MAX-PAIN for the OEX is 770 and for the SPX is 1415. The OEX and SPX closed at 770/1470, respectively; therefore there is still significant downside potential per the MAX-PAIN.
If the overall market does not continue to sell-off tomorrow or FRI, I am suspecting that the selling could intensify next week. Im not saying crash, just the possibility of some strong selling.
The CRB is still in a clear uptrend, and still no significant technical signs of a top yet. That does not help the stock market.
Needless to say that the last 2 weeks has been a great example of ZIG-ZAGGING, which makes it so hard to read the market, and Im sure many are getting whipsawed. However, I suspect that the ZIG-ZAGGING should come to an end by next week latest and be resolved to the downside.
seeya |
