FEB 12 INDEX UPDATE
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Short-term technical readings:
DOW - midrange
SPX - lower midrange, almost fullfilled CLASS 1 BUY signal
OEX - lower midrange, fullfilled CLASS 1 BUY signal
NAZ - pending CLASS 1 BUY, SPINNING TOP or imperfect THRUSTING PATTERN?
NDX - pending CLASS 1 BUY, SPINNING TOP or imperfect THRUSTING PATTERN?
VIX - 24.55, midrange
CBOE PUT:CALL RATIO - .64(neutral)
Per my short-term technicals, the overall market is in the lower midrange with obvious divergence between the DOW and the NAZ.
The CANDLES on the NAZ/NDX is either a SPINNING TOP(indecision) or an imperfect THRUSTING PATTERN(bearish continuation). Firstly, THRUSTING PATTERNs have low probability, and additionally it is an imperfect formation, nevertheless will not ignore the possibiity of another downside day. On the positive side, if it is a SPINNING TOP, that would be bullish since indecision candles commonly occur at pivot points, but does require confirmation since it also has low/fair probability as a reversal signal(by itself - one day pattern).
The SOX still continued to diverge from to the upside from the NAZ/NDX, and for months now the SOX has been a leading indicator for the NAZ/NDX. Of course that is not 100%, nothing is, but has been quite reliable for months. At the same time, I will not ignore the 3-BLACK CROWs on the OEX. So its still an issue when combinging the positive SOX and the 3-CROWs on the OEX - will the NAZ rally just a little and then the overall market selloff, or is the 3-CROWs a hint of sector rotation from the DOW into the NAZ. Still too early to tell.
On a subjective basis, even in light of EMLX/QLGC/etc tanking, not just selling off, the NAZ held on. I realise that EMLX/QLGC are not big stocks but noticed that the negativity was contained, while the SOX and BTK were up. Im not saying that the NAZ will head to the moon, just that it may be closer to a bottom than a top. Longer term I wont rule out the possibility of more downside in the NAZ/NDX, and for now Im looking at the 1800 region on the NDX as a strong support area, if the NDX continues to drop. Shorter-term the NAZ/NDX is due for some sort of a bounce this week, and it may only be a weak one. |
