SEPT 6 INDEX UPDATE
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Short-term technical readings:
DOW - upper midrange
SPX - midrange
OEX - midrange
NAZ - midrange
NDX - midrange
VIX - overbought(inverse to market)
PUT:CALL - .48
With last weeks bullishness in the market, I felt that the forthcoming short-term pullback would be weak, but now Im suspecting that this pullback could be stronger than expected in the NAZ.
The NAZ has strong horizontal support around 3800 and the 50 day and 200 day moving averages are also in that region. I feel that the 3800 region should hold if it gets that low. Prior to yesterday, I felt that a pullback for the NAZ may only be to the 4000 region, but now 3800 is possible.
Yesterday the NAZ had an ABONDONED BABY, and the NDX had a EVENING STAR DOJI. These formations are similar and both are significant candlestic reversal signals with strong reliability.
Another important issue that occured yesterday was the VIX breaking out of the WEDGE to the upside which implies bearishness for the market.
Recently there has been discussion of the various BEARISH WEDGES. NDX closed at the lower trendline of the WEDGE. The SPX and OEX also closed at the lower trendline of the WEDGE, but they did break below it on a intraday basis. So we need to see follow-thru to the downside to confirm the break.
There is a possibility that we may see a set-up for a 3-DAY PATTERN today for the NAZ, so if there is no strong follow-thru today where the NAZ closes slightly up or flat, dont get overly confident that the bottom of this short-term pullback is set.
The PUT:CALL RATIO was only .48, which implies that there is still a bit of complacency.
From a subjective position, there was really so much talk about the immediate rally after LABOR DAY. Hey, Im not saying that a rally cant happen today, its less likely though, but it could still happen. Regardless of what happens from here on, there was no strong rally yesterday which the media/so many were expecting. Just an example of the contrarian position where the market does not alway do what most expect.
Again, Im not expecting a huge selloff right now, but just normal in size rather than weak. |
