MAR 31 INDEX UPDATE
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Short-term technical readings:
DOW - oversold region/borderline CLASS 2 SELL
SPX - upper midrange
OEX - upper midrange
NAZ - lower midrange
NDX - lower midrange
VIX - 33.82, midrange(inverse to market)
VXN - 72.13, upper midrange(inverse to market)
5 DAY TRIN - 4.66
PUT:CALL - .76
Per my short-term technicals the overall market is basicly still in the midrange, with the DOW and NAZ diverging again. The 5-DAY TRIN is at 4.66 which is somewhat neutral, which is also confirming the midrange readings. As mentioned often, anything can happen when the short-term technicals are in the midrange, so its still a flip of the coin.
2 weeks ago the NAZ NET NEW HIGHs-LOWs got as low as negative 500 with the NDX dropping below 1600, but with the NDX below 1600 again on this past FRI, the NEW HIGHs-LOWs were only at negative 150 region. Not that the NAZ/NDX cannot go lower, but it does appear that the NET NEW HIGHs-LOWs is in the process of setting up some sort of a bottom. I did not say main bottom.
The SOX closed at 545 and 515 has been KEY support for the SOX. The SOX has been a leading indicator for the NAZ/NDX for months, so with FRI's weak performance in the SOX there may not be that much of a rally in the NAZ/NDX right now.
The NDX closed on FRI at 1573 and intraday it got as low as 1530. As mentioned previously the 1500-1400 region is a strong support area, so its getting very close.
For the last 15 trading days the NDX has been trading in a slightly declining tight trading channel. I suspect that this trading channel may be a FALLING FLAG(bullish). Also the rate of decline had slowed down. On 3/12(15 days ago) the low on the NDX was 1680 and as of yesterday the low was 1530, so over the last 15 days the NDX dropped 150 points, which on a relative basis has shown some slowing down.
Although I have turned more bearish on the market for the longer-term, I am still expecting some sort of a significant/FIBONACCI type rebound.
If/when I get the next CLASS 1 BUY signal, I most likely will be going long with some significance(not totally). One possibility would be a capitulation type of a selling day with high readings in the VIX/VXN/PUT:CALL ratio. If that occurs, I will probably consider that as a TRIGGER to buy(at the same time of a CLASS 1 BUY signal).
The main reason I have turned more bearish for the longer-term is due to deterioration in the ASIAN economies. Back in 1998 the U.S. economy was much stronger than it is now, and the CURRENCY CRISIS was still able to help pull down the US markets dramatically, where many thought that the bull market was over. Now that U.S. economy is weaker than in 1998, how well will it hold up to a weakening ASIAN economy. Japan is not doing well, but most of ASIA is showing signs of weakening like Taiwan, Singapore, Malaysia, Thailand, Indonesia,etc. Keep in mind that back in 1998 it started with the THAILAND BAHT. As for being more bearish for the longer-term, Im just not automatically accepting what so many analysts are saying that the U.S. will recover significantly by the end of the year. |
