AUG 23 INDEX UPDATE
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SHORT-TERM TECHNICAL READINGS:
DOW - upper midrange
SPX - upper midrange, got INTRADAY CLASS 1 SELL SIGNAL, INVERTED HAMMER
OEX - upper midrange, got INTRADAY CLASS 1 SELL SIGNAL, INVERTED HAMMER
NAZ - upper midrange, got INTRADAY CLASS 2 SELL SIGNAL, INVERTED HAMMER
NDX - upper midrange, got INTRADAY CLASS 1 SELL SIGNAL, INVERTED HAMMER
VIX - 19.62, oversold, DOJI, inverse to market
CBOE PUT:CALL RATIO - .55
Intraday I did get INTRADAY CLASS 1 & 2 SELL signals on the SPX/OEX/NAZ/NDX, and they all gave up the most/all of the INTRADAY GAINs forming INVERTED HAMMERs/GRAVESTONE DOJIs. Such is a significant hint that the reversal to the downside started.
Watch the various BEARISH WEDGES. Its interesting to note the there are smaller formations within a larger formations so I posted the various junctions points for the various LOWER TRENDLINES of the the BEARISH WEDGES:
SPX - 1500 & 1493, closed at 1498
OEX - 817, closed at 817.6
NAZ - 3975 & 3890, closed at 3958
NDX - 3850 & 3750, closed at 3828
Since some of those trendlines were steep, yesterdays closing prices are already below todays junction points.
Besides the BEARISH WEDGES in the indices, I am watching the BULLISH WEDGE in the VIX which is bearish for the market. The UPPER TRENDLINE of the BULLISH WEDGE of the VIX is at approximately 20.5 for today. Again, with resolved chart formations the resulting move in the direction of the break is strong.
The IMPORTANT ISSUE is that once a chart formation is resolved the resulting move is normally strong in the direction of the break. Although the above sounds extremely bearish we need to keep in mind that some of the above mentioned bearish wedges are small ones so the measurement downside targets are not huge.
As mentioned previously, Im not expecting a strong/huge pullback immediately. I suspect that this specific short-term downswing to be small to fair in size, followed by a small end-of-month rally producing a LOWER HIGH, then the selling to resume and intensify starting in early SEPT(could be as early as late AUG).
So although the above sounds bearish immediately, Im more inclined to say that we may only see ZIG-ZAGs/SECTOR ROTATION with a declining bias prior to a small end-of-month rally. Of course, I wont ignore the possibility that the market just drops hard, but for now Im not that bearish for the immediate short-term.
If the market doesnt selloff hard, some may become bullish. My position is that unless yesterday's intraday highs are broken significantly to the upside and stays above yesterdays intraday highs, then this short-term top is set and may even be the beginning phase of a more important mid-term top. The reason I mention this is that many feel that if it doesnt selloff immediately that is a bullish sign, where it may just be a set-up/process for more negativity down the road. Markets dont always go straight up or straight down. Commonly there are BASING periods before a runup and a PLATEAU period before a decline. |
