AUG 13 INDEX UPDATE
----------------------
SHORT-TERM TECHNICAL READINGS:
DOW - overbought region
SPX - midrange
OEX - upper midrange
NAZ - midrange
NDX - midrange
VIX - 21.24, lower midrange
CBOE PUT:CALL RATIO - .57
5 DAY TRIN - 4.86
Last week was definitely bullish for the DOW, and many are expecting that sort of bullishness will move to other sectors like the NAZ. Please keep in mind that for over 1 year we have see EXTREME SECTOR ROTATION where the DOW and NAZ were heading in opposite directions while the SPX straddle the middle. So to ignore the possibility of EXTREME SECTOR ROTATION, and assume that the NAZ will automatically follow the DOW may be unhealthy. No, I dont know for sure, but are watching for clues.
What I dont like with the NAZ is the market internals. For the NAZ on FRIDAY the UP VOLUME exceeded the DOWN VOLUME but the NEW LOWS was 134 and the NEW HIGHS was only 50, which implies that the the rally on FRIDAY was narrow. Yes I realise that the NEW HIGHS/NEW LOWS takes time to improve; however if it doesnt improve that may be a hint that the NAZ may not be able to catch up to the DOW on a relative basis.
Frankly, on a subjective basis, I suspect that some of the bullishness in the DOW was option related, so I need to see follow-thru in a bullish manner. Again, the DOW was bullish and did break above the TRENDLINE of the DIAMOND, which is also the MAIN TRENDLINE off of the DOW's all-time highs.
The OEX is now slightly above the MAX-PAIN level around 800. In light of such, Im not expecting a huge runup next week, but should at least have a positive slant. Keep in mind that expiration week is commonly flat to up.
As mentioned previously, I am still looking for a MID-TERM TOP during the 1st week of SEPT.
Perviously, I mentioned that GOLD should bottom, at least mid-term bottom, during AUG into early SEPT. Last weeks up move in the XAU may be a hint that such bottom was set. No Im not sure, but will be watching for follow-thru. |
