JULY 24 INDEX UPDATE
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CAUTION FLAG - CAUTION FLAG - CAUTION FLAG
SHORT-TERM TECHNICAL READINGS:
DOW - oversold
SPX - CLASS 1 BUY
OEX - CLASS 2 BUY
NAZ - CLASS 2 BUY
NDX - CLASS 2 BUY
SOX - PENDING CLASS 1 BUY
VIX - midrange
CBOE PUT:CALL RATIO - .46
5 DAY TRIN - 5.89
If the market continues down on TUE, I will be getting CLASS 1 BUY signals across the board, so a short-term bottom should arrive TUE/WED.
I am not expecting this forthcoming bounce to be that strongs since there were significant negative technical developments.
Here are the BEARISH WEDGES which have broken to the downside:
SPX OEX NAZ NDX RUT XCI
After futher observation I also notice that there is a BEARISH WEDGE on the DOW, which was a bit more difficult to notice. Here are the coordinates:
UPPER TRENDLINE - HIGHS of 6/15, 7/12, 7/17, 7/20
LOWER TRENDLINE - LOWS of 6/30, 7/6,
For TUE/WED the LOWER TRENDLINE is around 10,700
The SOX formed a PERFECT INVERTED HAMMER, and although the SOX was down it was not down dramatically. I got a CLASS 1 BUY signal on the SOX last FRIDAY and today was the BUY-IN DAY. That INVERTED HAMMER is a good clue of a reversal to the upside, but if it does not start to rebound or at least for a DOJI tomorrow, such would be a clue that I may be getting a NEGATED CLASS 1 BUY SIGNAL which is a significant negative. Im not saying that the SOX will negate the CLASS 1 BUY, just that it should be watched.
The 5-DAY TRIN at 5.89 is near the short-term BUY SIGNAL at 6.00, so such is lining up with my CLASS 1/CLASS 2 BUY SIGNALs.
With the various breaks to the downside for the various BEARISH WEDGES I sent up the CAUTION FLAG!!! That doesnt mean that the market will just sell off in a straight line. There should still be a bounce, but that bounce should not be strong and should be sold if the various resistance levels hold. The following short-term downswing could get quite negative. Im not one to set targets, but the environment is setting up for a possible strong sell off starting around the end of the 1st week of AUG/2nd week of JULY(approx around AUG 3-9).
Im not saying CRASH but this current negativity in the market could drop the various indices into 5%-10%+ declines from the HIGHs of mid JULY. The NDX has already declined about 7% and the SPX about 3.5%.
Previously I also had a CLASS 1 BUY on the XAU, and it continued down today. If it still continues down it may be on a verge of negated CLASS 1 BUY, which implies further downside. I am suspicious of the selling in the XAU since GOLD is still holding at HIGHER LOWS. |
