Paul,
The rally that started FRIDAY definitely needs immediate follow-thru, with MON closing up, otherwise forget it. What is in favor of a rally now:
1) END-of-MONTH RALLY timeframe
2) STRONG OVERSOLD readings in many technical indicators
3) various cycles ending. My mid-term cycle closed either WED or FRI of last week, and others have cycles ending this coming week.
Its a fair assumption that with the dramatic response to ANGEL's comment that GREENIE will cut this week, if it doesnt occur this week, we could see a retest of FRI's lows and possibly more.
I was pondering what NANCY had mentioned about the NDX having difficulty breaking above the 2400 region. Assuming that FRI was the bottom and that the NDX can not break above 2400, that would mean that the NDX was unable to complete the common FIB 38% rebound. Not that it is for sure, but that could also imply that PHASE 2 is still not over and that the bottom of PHASE 2 could even be lower since that senerio would produce a LOWER HIGH, also implying that the downtrend is still intacted.
Just want to add that although there has been alot of talk of the 3-PHASES of bear market,that doesnt mean that it will happen for sure; howerver on the other hand we should not ignore the possibility of a 3rd DOWN-PHASE.
My guess is that if there is a 3rd PHASE the NDX should bottom in the 1500-1400 region, with worse case senerio in the 1100-1000 region. Some may say thats impossible, but 1500 is only about 400 points lower than FRI's lows, and if the RUT and SOX and BTK, which have held up better than the NDX, start to sell off with vigor, that 1400-1500 target may not be so crazy. Of course, no certainty of a PHASE 3.
EDIT: Forgot to mention - the possibility of NEGATED CLASS 1 BUY signals still exists. The CLASS 1 buys arrived last WED with the buy-in on THUR, so the minimum requirement still has not yet been fulfilled. |
