AUG 26 INDEX UPDATE
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SHORT-TERM TECHNICAL READINGS:
DOW - pending CLASS 1 SELL SIGNAL, DOJI
SPX - pending CLASS 1 SELL SIGNAL, GRAVESTONE DOJI/INVERTED HAMMER
OEX - pending CLASS 1 SELL SIGNAL, INVERTED HAMMER
NAZ - pending CLASS 1 SELL SIGNAL, DOJI/GRAVESTONE DOJI
NDX - pending CLASS 1 SELL SIGNAL, DOJI/GRAVESTONE DOJI
VIX - 19.10, oversold(inverse to market)
CBOE PUT:CALL RATIO - .50
5 DAY TRIN - 4.75
The media all week focus on the many bullish factors that occured in the market, with market internals improving and new highs is selective stocks and indices. I will not go into the detail of these bullish factors since it would be repetitive.
Subjectively the media/analyst/J6P seems to be quite bullish, maybe a bit over bullish. Sometimes I surf the some individual stock threads where I mentioned on one that I felt that the overall market was still in a trading range, the response I received from an obvious BULL was that I was a complete F-----G IDIOT. And that was more the concensus rather than the exception. Seems a bit overly bullish. The only signs of bearishness I could find was on various threads on SI. I also had a friend who called me up and asked if he should add to his long HiTECH positions which I got him into in early AUG at the trough. He is quite bullish now since he has been hearing alot of talk about the NAZ setting NEW HIGHS around 6000 by the end of the year. Frankly, I was surprised that he was talking such a high figure, since I havent heard projections that high. When I mentioned that we are near a short-term top he started arguing with me, until I reminded him that it was on my advice to go long in early AUG, then he shut-up. How soon some BULLs forget. Another friend of mine who is actually part of a recent BIOTECH IPO claims that the BIOTECH MANIA only started and has alot more to go, about 2 more years. His company/stock is on the verge of setting a new high, so I can understand his bullishness. So from those J6P I speak to, it appears that emotions are getting high again and possibly near exuberance levels.
Frankly, I am not expecting a strong short-term pullback although I am starting to wonder in light of strong bullish sentiment.
What also scares me about all the bullishness in the market is the number of BEARISH WEDGES which are developing. The follow are the JUNCTION POINTS of the LOWER TRENDLINE of the BEARISH WEDGES for next week. Please keep in mind that the following are eyeball approximations:
DOW - 11150 for MON
SPX - 1502-1503 for MON
OEX - 822 for MON
NAZ - 3975 for MON
NDX - 3850 for MON
SOX - 1145 for MON
As one can see, those junction points are getting quite close. Im not saying for sure that they will all break to the downside, but if they do, that should be a very good warning sign that the market could go lower. NO - I didnt say crash!
I hear often how the market internals are improving, and I agree they approving. However, are they improving enough to support another strong bull trend or are they just good enough to support just a trading range trend. When the DOW was in a strong BULL TREND the NYSE NEW HIGHS was consistently trading in the 200-400 region with spikes as high as 700. Right now the NYSE new highs are near 100. So back to my question - good enough for a strong bull trend or just a trading range trend? |
