SEPT 10 INDEX UPDATE
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Short-term technical readings:
DOW - midrange
SPX - CLASS 2 BUY
OEX - CLASS 2 BUY
NAZ - CLASS 1 BUY
NDX - CLASS 1 BUY
VIX - 20.68, midrange
PUT:CALL RATIO - .52
5 DAY TRIN - 5.46
Keeping it simple, as negative as the NAZ/NDX appeared last week, they still did not produce LOWER LOWs, although the SPX/OEX did produce minor LOWER LOWs.
Per the short-term readings, it appears that a bounce should start in the MON-TUE timeframe for the NAZ/SPX. For this immediate short-term rebound I am suspecting that it may not be that strong in light of the varios bearish wedges which were broken to the downside - I will not go into detail of these recently resolved wedges to the downside since alot of discussion has been made of them.
This forth coming week is expiration week, which is commonly up or flat. The OEX MAX-PAIN is around 815 and the OEX closed FRIDAY at 813, so arbitrage may not be that big of an issue this week. The average maximum divergence from the MAX-PAIN is 20-25 points; I not saying that such will occur, just stating an observation.
So Im suspecting that this forthcoming short-term rebound not to be strong and that this week should be slightly up/flat with the possibility of strong oscillations(ZIG-ZAGs). If this week only produces a slight rally, then last week was probably a mid-term top and the chances increases that the following week could see the selling intensify. Keep in mind that the week after expiration is commonly a weaker period and tie that in with the downside resolutions of the various BEARISH WEDGES.
For the longer-term view, I refer to the weekly charts on the SPX, OEX, NAZ, NDX, SOX, IIX, DOT. What they all have in common is that per the weekly chart they have also developed BEARISH WEDGES/FLAG, and they are significant in size. These are not the same wedges which were broken to the downside this pass week; these are much larger ones. The DOT has already broke its FLAG to the downside about a month ago. I realise that chart patterns should not be this long, but I will not ignore the possibility that these BEARISH WEDGEs are still valid, in light of such a dynamic/hard to predict market.
Just heard this morning that OPEC agreed to add an additional 800,000 barrels of production. Was that already priced into the market or not - I dont know, will let others figure out. If it was not priced in, it is possible that there could be an UP-GAP at MONDAY's open.
The DOW/NYSE/SPX all show signs of technical strength, but the NAZ/NDX show signs of weakening. In this dynamic market, situations could reverse easily, but for now the HiTECHs are showing less strength relative to the DOW/NYSE/SPX.
seeya |
