JAN 31 INDEX UPDATE
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Short-term technical readings:
DOW - overbought region, INTRADAY BORDERLINE CLASS 1 SELL, LONG LEGGED DOJI
SPX - upper midrange, INTRADAY CLASS 1 SELL, imperfect INVERTED HAMMER
OEX - upper midrange, INTRADAY BORDERLINE CLASS 1 SELL, INVERTED HAMMER
NAZ - midrange
NDX - midrange
VIX - 24.29, oversold(inverse to market)
CBOE PUT:CALL RATIO - .61(neutral)
Per my short-term technicals, the overall market is in the upper midrange, with hints that some sort of a reversal to the downside has started.
What was interesting was that the NEW HIGHs on the NAZ actually improved today even though the NAZ was down 66 points and the NDX was significantly down 93 points. In light of the improve NEW HIGHs Im more inclined that the NAZ/NDX should not decline alot.
On the NAZ/NDX I suspect that a RECTANGLE may be forming.
chartpatterns.com
The LOWER TRENDLINE(horizontal) of this POSSIBLE RECTANGLE is around the upper side of the recent gap around 2530-2540(NDX) and UPPER TRENDLINE(horizontal) around 2740. RECTANGLEs normally take the direction of the most recent trend, which in this case is up. So if the 2530 region can hold, this possible RECTANGLE remains intact. The measurement of this RECTANGLE is about 200 points so the possible target is in the 2940 region on the NDX, which falls in line with a NAZ target around 3050-3100.
In light of this possible RECTANGLE, Im suspecting that the downside for this pullback is around 2530-2540. On the other hand if the 2530-2540 region breaks to the downside, the NAZ/NDX could drop significantly. |
