OCT 10 INDEX UPDATE
----------------------
Short-term technical readings:
DOW - oversold
SPX - oversold
OEX - oversold
NAZ - lower midrange
NDX - lower midrange
VIX - 26.33, overbought(inverse to market)
CBOE PUT:CALL RATIO - .77(bullish/ buy region)
Yesterday I did get INTRADAY CLASS 1 BUY signals on the NAZ/NDX, but with the strong intraday rebound the short-term technicals moved up significantly to the lower midrange. So the the minimum rebound may have already been achieved.
During the strong bulltrend periods of late last year there were extended periods of time where the technical indicators just remained and oscillated within the overbought region and the market continued up. The reverse appears to be occuring now, where we are basicly getting oscillations in the oversold region and the market just continues down.
Eventually we will get a tradeable rally to the upside, and per my WEEKLY analysis that rally could start either this week or next.
There are so many posts now which are attempting to identify where the bottom is, and right now there is no strong technical evidence that the bottom is in. But the question is how low will it go before a main bottom is set. I dont know, but I will say this is not the time to overly bullish nor overly bearish(short-term wise).
For me it is really not the best use of time and energy and emotion to attempt to identify the bottom right now. Why not adjust ones trading style to adapt to the environment, instead of trying to force/guess what the market will do that best fits ones trading style.
In other words, this is the time to be nimble and not to be overly anything(short-term) except in cash. For those who a fully invested on the long side, they dont have a choice but to attempt to identify the bottom, and Im not suggesting to sell now either - I dont know. Its interesting to see how so many know exactly where the market is heading. Some will be right but most will be wrong, since the market does what most expect it to ggggggggggggggggg.
I have mentioned this several times. Although conventional Technical Analysis is not confirming strong capitulation yet, that does not mean that a MAIN BOTTOM has to be formed right now. The main bottom could be formed in NOV or DEC or 2001 or 2002, etc. So, even in light with all the negativity, I will not ignore the possibility that a MAIN BOTTOM will not be formed now. |
