DEC 22 INDEX UPDATE
----------------------------
Short-term technical readings:
DOW - midrange, MAROZUBO
SPX - midrange, MAROZUBO
OEX - lower midrange, MAROZUBO
NAZ - lower midrange, MAROZUBO
NDX - lower midrange, MAROZUBO
VIX - 31.62, midrange, ISLAND REVERSAL
CBOE PUT:CALL RATIO - .61
NAZ NEW LOWs - 340
Per my short-term technicals the overall market is now basicly in the midrange, implying that theres about the same amount of upside potential room as there is downside potential room.
All the major indices had WHITE MAROZUBOs which implies bullish continuation. However, it is also common that right after a MAROZUBO the next day could possibly be flat to slightly down, with buying to resume thereafter. These MAROZUBOs is also in line with the 3-DAY PATTERN, where today was DAY-1. DAY-2 is either FLAT or UP-STRONG(similar to DAY-1), and if DAY-2 is FLAT, then DAY-3 is up. So Im looking for TUE to be either flat or up, and possibly up strongly. If TUE, is flat, then WED could be up. I have noticed recently that the 3-DAY PATTERNS have a better chance of succeeding if it is in the same direction of the trend. During the recent selloff there were a few 3-DAY PATTERNS(upwards) which failed. So if this 3-DAY pattern works then that would imply that the immediate trend may also be changing to the upside.
Although I mainly concentrate on the indices, a very bullish candlestic patterns have developed on CSCO. On Thur it developed a BULLISH ENGULFING and today an ISLAND REVERSAL. Since CSCO is a bellweather for the HiTechs, this is a good sign for the NAZ/NDX for the short/mid-term(30 days).
I dont want to sound overly bullish, since I am just looking for a FIBONACCI REBOUND. Now the question is which peak do we use to make the FIB calculation on the NDX - should it be the peak at 4816(MAR) or 4147(AUG) or 2990 DEC. Here are the FIB REBOUND LEVELs based on these 3 peaks, assuming that 2199 is the LOW:
4816-2199 = 3193(38%) 3508(50%) 3822(62%)
4147-2199 = 2939(38%) 3173(50%) 3407(62%)
2990-2199 = 2500(38%) 2595(50%) 2689(62%)
Im leaning more towards the 2900 or 4147 levels for now.
A key resistance is the DOWNWARD TRENDLINE from the SEPT PEAK, which is around 2700-2750 for next week.
Happy Holidays |
