JULY 26 INDEX UPDATE
----------------------
DOW - CLASS 1 BUY SIGNAL
SPX - PENDING CLASS 1 BUY SIGNAL
OEX - CLASS 1 BUY SIGNAL
NAZ - lower midrange
NDX - lower midrange
VIX - 22.17, midrange
INTRADAY the NAZ and NDX also gave CLASS 1 BUY SIGNALs and they rebounded significantly off of their intraday lows, giving the hint that some sort of a bounce/rally may have started.
The DOW today clearly broke below its BEARISH WEDGE and closed only a few points above the LOWER TRENDLINE of the DIAMOND FORMATION.
I have conflicting closing prices on the VIX. METASTOCK say 22.75 while QUOTE.COM says 22.17. If it is 22.75 then the VIX did break its BULLISH WEDGE to the upside on a closing basis, which is another negative for the market. If it did close at 22.17 it closed right at the UPPER TRENDLINE of the WEDGE. Regardless, on a intraday basis the VIX did break above the UPPER TRENDLINE, and that is a significant hint that the VIX should head higher.
In the last 5 minutes of the day the SPX and DOW sold off strong and I believe that such was mainly due to the re-weighting of the SPX.
There are just so many BEARISH WEDGES/FLAGS which have either broken to the downside or are close to it. Besides those already mentioned, there is a BEARISH WEDGE in the VLE(VALUE LINE) which is a broad based index and the DOT(INTERNET) closed a few points above its LOWER TRENDLINE of a BEARISH FLAG.
In light of all the negativity, I am still expecting a weak short-term bounce, and with the NAZ/NDX rebounding nicely off of their intraday lows, its a hint that the reversal may have started.
Although I am playing a short-term trade to the upside, I am bearish on the market in light of all those bearish wedges breaking to the downside, and my CAUTION FLAGS are still FLYING. HANDs-a-WAVING. DANGER WILL ROBINSON!!!!!!!
Lee mentioned a bearish wedge or flag on GE. I believe it is a bearish flag, and GE close right on the LOWER TRENDLINE of that BEARISH FLAG.
As mentioned previously, if during this forthcoming rally the NDX is unable to break above the recent LOWER TRENDLINE of the BEARISH WEDGE, around 4000, then I would consider that as a significant negative and will probably go significantly short the USPIX at that time.
LOTS of NEGATIVES. CAUTION FLAG still FLYING. |
