NOV 3 INDEX UPDATE
------------------------
Short-term technical readings:
DOW - overbought
SPX - borderline CLASS 1 SELL signal
OEX - CLASS 1 SELL signal
NAZ - CLASS 2 SELL signal
NDX - ClASS 2 SELL signal
VIX - 26.64, CLASS 2 BUY signal(inverse to market)
CBOE PUT:CALL - .50, approaching complacency levels but not at extremes yet
Previously mentioned that there are bearish chart patterns(FLAGs/WEDGES/BROADENING) in the SPX/OEX/NDX/NDX/SOX, and these patterns are still intacted.
As mentioned by some on SI, there is a very clear BEARISH WEDGE developing in the NAZ/NDX, which is best seen on the 60-min chart.
The APEX of this WEDGE will arrive late tomorrow/early MONDAY, and the upper trendline of this wedge is around 3350 on the NDX and the lower trendline around 3300 for tomorrow. Its getting very tight for tomorrow and will be resolved tomorrow/MONDAY. The important issue is that the resulting move once the WEDGE is resolved should be strong. The APEX of this BEARISH WEDGE is lining up nicely with the CLASS 2 SELL signals on the NAZ/NDX - an intraday move to the upside in the NAZ/NDX tomorrow could produce a CLASS 1 SELL signal.
Im not one that relies on the MEASUREMENTs of chart formation, but will state that the measurement of this BEARISH WEDGE on the NDX is targeting a break below 3000. Again, I only mentioned it, since I wont ignore that possiblity but I also dont follow chart formation measurements religiously.
The BTK(biotechs) had a "3-WHITE SOLDIERS" which a very bullish candlestic pattern. I consider it the opposite of the bearish "3-BLACK CROWs), with similar reliability and intensity. Its implying that NEW HIGHs in the BTK are likely. Please keep in mind that if there is a pullback, that pullback should be small and should be bought.
We have the 3-WHITE SOLDIERS on the BTK, which is quite bullish, but at the same time we have the BEARISH WEDGE on the NAZ/NDX which is quite bearish with a measurement to below 3000(NDX). Combining the 2 together, I feel that the 3-WHITE SOLDIERs may be able to prevent the BEARISH WEDGE from taking the NDX below 3000. This is just speculation .
One more strong negative for the the NAZ/NDX is the SOX. As mentioned previously the SOX is also forming a larger BEARISH FLAG. What is concerning is that for the last 5 trading days the SOX has been hugging the LOWER TRENDLINE of its BEARISH FLAG. One could argue that the are 2 possible lower trendlines. One which would be around 720, and the other around 705. Any negative movement tomorrow will break that higher of the 2 possibilities. I have firmly believed for months that the SOX is a leading indicator for the NAZ/NDX, so a breakdown of this WEDGE in the SOX would be a strong negative for the NAZ/NDX.
The DOW is right now bullish. Not that I will make too much of it, take a look at the MONTHLY CHART on the DOW. Thats a perfect PAPER UMBRELLA. So is that UMBRELLA a HAMMER(bullish) or is it a HANGING MAN(bearish) for the OCT CANDLE. It can be argued in both directions. Thats the 1st time in 4 years that the DOW had such a candle on the monthly chart. |
