JAN 11 INDEX UPDATE
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Short-term technical readings:
DOW - lower midrange
SPX - upper midrange
OEX - upper midrange
NAZ - overbought region(closing basis), did get intraday CLASS 2 SELL
NDX - overbought region(closing basis), did get intraday CLASS 2 SELL
VIX - 28.81, oversold region(inverse to market)
CBOE PUT:CALL RATIO - .48
Per my short-term technicals, it appears that we are starting to see some sector rotation from the DOW into the NAZ. If the NAZ/NDX were to continue up I could get a CLASS 1 SELL signal as early as FRIDAY, with the WINDOW until TUE's HIGHs(MONDAY is a holiday). The PUT:CALL RATIO at .48 is getting closer to sell region also.
The strong positive today was the NAZ setting a HIGHER HIGH on both a closing and intraday basis. The NDX set a HIGHER HIGH on a intraday basis, but not on a closing basis. Although the HIGHER HIGH was not significant, it did create 1 complete cycle of a HIGHER LOW and HIGHER HIGH. This is a significant hint that the immediate trend is reversing upwards for the NAZ. Of course, it would be best to get more confirmation since the HIGHER HIGH was only slight. The SOX also made a HIGHER HIGH which helps confirm the HIGHER HIGH in the NAZ.
The MARKET INTERNALs for the NAZ continue to improve, with the NEW HIGHS exceeding the NEW LOWs - 67/26. Please note that the NEW LOWs are getting quite low, in light of it hitting 900 a few weeks ago. Feel that this is also a positive support for the NAZ/NDX.
Im not saying that the NAZ is going to the moon, but feel with more confidence, in light of todays performance, that an important/mid-term bottom has been set for the NAZ/NDX.
Now the question is how much higher before a short-term top? Here are some resistance areas for the NDX:
1) TRENDLINE from the SEPT PEAK - around 2600
2) TRENDLINE from 9/20 - around 2700 (has more junction points
3) 50 DAY MOVING AVERAGE - around 2700
4) HORIZONTAL RESISTANCE(minor) - around 2650
5) QQQ MAX-PAIN at 60 - using a buffer of 5 QQQ points, 65 on the QQQ is around 2600
Its fair to say that theres a bit of resistance in the 2600-2700 region, for the short-term. In light of option expiration, Im more inclined that 2700 will be tough to break thru prior to expiration(next FRIDAY). Im suspecting ZIG-ZAGs thru expiration.
After expiration, I feel that some selling could resume, but not very strong. Possibly just more ZIG-ZAGGING with a slight downward slope into the FOMC meeting at the end of JAN.
Per my personal MUTUAL FUND account, I closed 70% of my UOPIX position(long-NDX), and hedged 1/2 of the remainder with USPIX(short-NDX). So Im still biased to the long-side in the ratio of 2:1.
In our WEBSITE account I closed 2 of the 3 equal UOPIX(long-NDX) positions. I did not hedge it since the overall position wasn't large as it was in my personal account, and since we are trying to close the account for the year ending(JAN 21, 2001). |
