JULY 12 INDEX UPDATE
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SHORT-TERM TECHNICAL READINGS:
DOW = PENDING CLASS 1 SELL, closed as a CLASS 2
SPX - PENDING CLASS 1 SELL, closed as a CLASS 2
OEX - PENDING CLASS 1 SELL, closed as a CLASS 2
NAZ - midrange
NDX - midrange
VIX - 22.39, lower midrange(inverse to market)
CBOE PUT:CALL RATIO - .53
5 DAY TRIN - 4.99
I got CLASS 1 SELL signals intraday on the DOW/SPX/OEX, and they all closed off of the intraday highs with the DOW closing about 80 points below the intraday highs. Keep in mind that on a closing basis, I did not get a CLASS 1. I mention it, since it is better to get CLASS 1 signals on a closing basis, since a CLASS 2 on a closing basis still implies that a CLASS 1 is still possible, even though a CLASS 1 was registered intraday. Regardless the DOW clearing started selling off some.
The key to watch on the DOW/SPX/OEX to determine if the pullback that started yesterday is still intact is whether the intraday highs can hold any rally. If the DOW/SPX/OEX is up today and closes at their highs I should get CLASS 1 SELL signals on a closing basis, even if yesterdays highs are not taken out to the upside.
Yesterday, I noticed that when the DOW was rallying strong, the NAZ/NDX was starting to lag in the morning and the lagging intensify during the day, implying that SECTOR ROTATION may be beginning. Keep in mind that I never got a CLASS 1 SELL signal on the NAZ/NDX, only a CLASS 2 last FRI, and that a reversal off of a CLASS 2 implies weakness. The NDX would need to break above last FRI's highs of 3884 to end this reversal to the downside in the NDX.
The futures are up significantly this morning, but it may not be the best to get overly bullish unless the peaks mentioned above are taken out to the upside.
Theres alot of bullish talk since the DOW took out 10,700 to the upside and broke above 10,800 intraday. That was bullish to the extent that the DESCENDING TRIANGLE may be negated, but that also needs further confirmation. It has also been mentioned that the DIAMOND FORMATION in the DOW was negated when 10,700 was broken to the upside - thats not correct. The DIAMOND had 2 descending trendlines, one around 10,700 and the more symetrical trendline around 11,025 for yesterday so the DIAMOND is still intact.
Another interesting fact is that the APEX of the TRIANGLE should take place around late AUG/SEPT. Is it possible that a strong sell off could occur right before the election. Most would say that would not be possible. If the DIAMOND is not negated to the upside, the other possibility is that the APEX gets extended.
Seeya |
