Mar 23 INDEX UPDATE
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Sorry Im limited on time so will have to make it a quick one.
As mentioned often, with declines of greater than 7%, statistically the probability of a retest is high. In light of that, I wouldnt look for confirmation of a bottom until I saw how the retest did. So Im not expecting this the rally that started yesterday to last more than a few days.
Previously I mentioned that I was adding long positions(UOPIX)on the way down and that if the NDX got to around 1500 I would only be in 20%-25% cash, and by yesterdays close I've gone from 85% cash to about 50% cash, and added strongly over the last 2 days. I will be sticking to my strategy mentioned previously, that once my short-term technicals reach the midrange, which could occur today, I will start hedging/taking profits on some of my long positions, and once/if I get a CLASS 1 SELL I will have all my long positions closed and go short. I am strongly expecting a retest, which could come as early as next week, but dont know for sure.
The NAZ NET NEW HIGHs-LOWs deteriorated significantly to around negative 500 yesterday, so we need to watch for improvements in it. If there is no significant improvement over the next few days, that could be confirmation that a retest is coming soon, rather than later.
So will the NAZ move independently of the DOW or with the DOW. The DOW looks awful and there is no signs of a bottom yet in the DOW. The NAZ looks better since there was some evidence of stocks basing, but if the DOW continues to set LOWER LOWs will the NAZ be able to hold up independently. I believe the key to that is still the SOX and the NAZ NEW HIGHs-LOWs. If the SOX breaks below the 515 support, the NAZ/NDX could still move significantly lower.
As for the SOX, right now up 19 points, just entered the overbought region and is only a hair away from a CLASS 2 SELL signal. |
