NOV 21 INDEX UPDATE
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Short-term technical readings:
DOW - lower midrange
SPX - lower midrange
OEX - lower midrange
NAZ - oversold
NDX - borderline oversold
VIX - 30.28, lower midrange(inverse to market)
CBOE PUT:CALL RATIO - .76
5 DAY TRIN - 6.03
Per my short-term technicals the overall market is approaching the overbought region. If the NAZ/NDX continues down, I could get CLASS 1 BUY signals in 1-2 days, so we are approaching a short-term bottom.
The strong negatives in the market today:
1) NAZ and NDX both created LOWER LOWs on a closing basis, but not on a intraday basis.
2) The BTK(biotechs) produced a significant LOWER LOW.
A minor negative, and some may just view it as neutral, the CBOE PUT:CALL RATIO closed at .76, which is bullish. However it is not at extreme peak levels.
The 5-DAY TRIN gave a reading of 6.03 and readings of 6.00 and greater are commonly short-term BUY SIGNALS. The 5-DAY TRIN could hang around the 6.00 range for a few days before the buying kicks in, but with my short-term technicals approaching the oversold region, things are starting to line up for, at least, a short-term bottom.
Also, my MID-TERM CYCLE LOW is arriving today(+/- few days).
Previously, the NAZ had a POSITIVE DIVERGENCE in the NEW LOWs. With the NEW LOWS back in the 350 range(similar to MID-NOV). Back in OCT the NAZ NEW LOWs were approaching 500. Relative to Mid-NOV the POSITIVE DIVERGENCE has been negated and is now neutral, but compared to the OCT NEW LOWs near 500, the POSITIVE DIVERGENCE still is intact. If the NAZ NEW LOWs do not drop alot more a approach the 500 level, I am holding onto the POSITIVE(BULLISH) DIVERGENCE in the NAZ NEW LOWs:
stockcharts.com
Also, the MACD on the NDX had a POSITIVE DIVERGENCE. Compared to the mid-OCT readings that POSITIVE(BULLISH) DIVERGENCE still exists.
stockcharts.com
The next horizontal support in the NDX is in the 2550-2600 region. Im not saying that the NDX will definitely get that low but since it it less than 200 points away, it is not an impossibility and should not be ignored. If the NDX does get to the 2550-2600 region I will definitely get CLASS 1 BUY signals and with my mid-term cycle low arriving this week I would suspect that the 2550-2600 region would be a significant low, and a platform for at least a 38% FIBONACCI rebound to start.
Also want to mention that I also just got a borderline CLASS 1 BUY SIGNAL on the NDX per my WEEKLY CHARTs, so things are lining up for a mid-term bottom.
As mentioned previously it is common that even in severe bear markets it is common to see a 38% FIBONACCI rebound of the immediate down leg.
For this discussion lets say that the NDX does get to 2600. Based on 2600 here are the FIBONACCI REBOUND LEVELs based on the SEPT PEAK of 4080 and the OCT PEAK of 3380:
4080-2600 = 3162(38%) 3340(50%) 3518(62%)
3380-2600 = 2896(38%) 2990(50%) 3084(62%)
If we use the 2742 figure as the low, then the FIB LEVELs would be approximately 100 points higher.
Frankly, I feel that this week should be a good time to ease into LONG positions for short/mid-term trades, and maybe even longer-term trades in the NAZ, since I feel that we are close to a significant low. I did say EASE INTO - I didnt say go HOG WILD.
As negative as the market appears, and Im not saying that it cannot head lower in the short-term, but I am suspecting that the market is setting up for a significant rally. With my short-term technicals approaching the oversold region and just a few days from a CLASS 1 BUY signal, I will start to ease out of my short positions starting today.
Yesterday I did take some profit from short positions in my MUTUAL FUND ACCOUNT, and now only have a slight short bias. I will start to close some more short positions today and by the end of this week/early next week I want to be with a firm LONG(BULLISH) BIAS. Please keep in mind that another reason I will start today is that playing mutual funds are based on closing prices. |
