JAN 8 INDEX UPDATE
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Short-term technical readings:
DOW - lower midrange
SPX - lower midrange, DRAGONFLY DOJI
OEX - lower midrange, BLACK HAMMER
NAZ - lower midrange, DRAGONFLY DOJI
NDX - midrange, WHITE HAMMER
BTK - borderline CLASS 1 BUY(intraday signal - not as valid as a closing signal)
VIX - upper midrange(inverse to market)
CBOE PUT:CALL RATIO - .64
5-DAY TRIN - 8.03
Per my short-term technicals the overall market is in the lower midrange, so if the market moves/continues up I would get CLASS SELL signals in 3-5 days.
The SPX/OEX/NAZ/NDX formed HAMMERs/DRAGONFLY DOJIs which are candlestic reversal signals, but do require confirmation. In the case of the only the NAZ, there is a possibility of a MORNING STAR DOJI if there is an UP-GAP at tomorrows open.
One issue that could limit the upside in the NDX is the MAX-PAIN in the QQQ, which is now at 60, and todays close was at 57.25. So thats only about 3 QQQ points which is 120 NDX points; therefore giving a target for the NDX of only about 2400. I do not try to us the MAX-PAIN to the number, but prefer to use it with a buffer instead. I have not really follow the QQQ MAX-PAIN so my guess is that the buffer for the QQQ max-pain is about +/- 5 QQQ points. If anyone has a better handle on the QQQ buffer, please comment. A little more promising is the MAX-PAIN for the OEX which is now at 700, and the OEX closes at 677. The buffer of the OEX max-pain is around 20-25 OEX points. So this implies that there is still significant upside in the OEX.
Assuming that today was a short-term low, then the NAZ/NDX/OEX produced minor HIGHER LOWs, which is bullish since it implies an uptrend(one complete short-term cycle of a HIGHER HIGH and a HIGHER LOW). Now the next test is for the indices to produce another HIGHER HIGH to continue the bullishness.
The 5-DAY TRIN is again at very high levels above 8.00, so that also supports some sort of a short-term rally.
Althought there were bullish developments, I am not going hog-wild bullish yet and still looking for clues on a daily basis.
I did add another UOPIX position(long-NDX) in my mutual fund account and now less than 60% cash, 40%+ long in the UOPIX. I am also continuing to play small caps in my trading account. |
