OCT 17 INDEX UPDATE
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Short-term technical readings:
DOW - oversold region
SPX - lower midrange
OEX - lower midrange
NAZ - midrange
NDX - midrange
SOX - oversold region
VIX - 33.49, upper midrange(inverse to market)
CBOE PUT:CALL RATIO - .89
Today the DOW got as low as 10026, which is only 3 points above last weeks lows, so it appears that a retest is in process. Although the DOW did bounce off of last weeks lows, my short-term technicals for the DOW is only in the oversold region and is 1-2 days from a CLASS 1 BUY signal, so there is still downside potential.
With the overall market in the lower midrange(averaging basis), I would get a CLASS 1 BUY signal in 2-3 days for the overall market if it continues down.
Late yesterday afternoon, I noticed that the SOX was selling off hard and that was the reason I decided to open another short-position in the USPIX to make my fund account evenly hedged - no bias in either direction. Although the SOX was really beaten up today, the NAZ/NDX held up better than expected, giving me a hint that NAZ/NDX may be building a base now. That doesnt mean that it cant go lower, just that a mid-term bottom may be in the process of being set/confirmed. Some felt that last weeks lows in the NAZ/NDX were the lows and what I saw today - they may be correct, just have to retest it to some degree whether it has to go right down to it or bounce at a higher level.
Previously, I believe that I mentioned that I had a mid-term bottom coming this FRIDAY(+/- few days). I had doubts that such would work since this FRIDAY is expiration and expiration week is normally up or flat. With the recent developments, it may have a chance of working.
Last week we got the IDENTICAL 3-BLACK CROWs on the SPX. It is working well so far and over-rode the BULLISH ENGULFING PATTERN. Whether it produces LOWER LOWs, I really dont know, but it does appear that the SPX could at least get lower to a retest. Regardless, I would call this 3-BLACK CROW as being successful.
Note that the PUT:CALL ratio got to .89 today. The fear is coming back quickly and is a hint that a bottom is not that far away.
If the market does continue to sell off, the forthcoming CLASS BUY signals would be lining up nicely with my MID-TERM CYCLE LOW of later this week/early next week. If the market does continue down, I will be preparing to go long, and may start to add long positions(USPIX-long NDX) as soon as tomorrow. My goal is to get my fund account to about 30%-50% long before the reversal starts. Keep in mind that it is a mutual fund and limited to closing prices. |
