APRIL 13 INDEX UPDATE
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Short-term technical readings:
DOW - CLASS 2 SELL SIGNAL
SPX - CLASS 1 SELL SIGNAL
OEX - CLASS 1 SELL SIGNAL
NDX - CLASS 1 SELL SIGNAL, BULLISH ENGULFING
NAZ - CLASS 1 SELL SIGNAL, BULLISH ENGULFING
SOX - BORDERLINE CLASS 1 SELL SIGNAL, 3-WHITE SOLDIERS(imperfect)
VIX - CLASS 1 BUY SIGNAL(INVERSE TO MARKET)
VXN - CLASS 1 BUY SIGNAL(INVERSE TO MARKET)
Per my short term technicals the overall market is in CLASS SELL territory, and clearly supported by the VIX/VXN. So the window for the short-term top should be until MON's highs.
3-WHITE SOLDIERS(imperfect) on the SOX and BULLISH ENGULFING on the NAZ/NDX are significant bullish candlestic patterns. What is quite confusing is that the BULLISH ENGULFING pattern should occur after a period of selling not buying. Is it an anomoly or is it a bullish hint. Since I do have CLASS SELL signals, Im not ignoring that it could be an anomoly and the market may just sell off, but I also wont ignore the possibility that it could be a positive hint. And we have the imperfect 3-WHITE SOLDIERs on the SOX(upper shadow of DAY 2 was too long), so do we ignore it or is it also a possible BULLISH HINT.
For this discussion, lets assume that the 3-White Soldiers is a valid formation. It is common that after the 3rd day of the 3-SOLDIERs that there is a small pullback before buy resumes, similar to the infamous 3-BLACK CROWs in reverse. Not to get too bullish about this pattern, need to mention that I feel that a 3-white soldier pattern has a better chance of succeeding if it is in the same direction of the bigger trend, which is not the case right now.
Next week is expiration week which is commonly FLAT/UP, so tying in the imperfect BULLISH ENGULFING/3-WHITE SOLDIERs I am suspecting that the selling next week may not be that strong.
In light of the the imperfect 3-WHITE SOLDIERs/BULLISH ENGULFING, I did not go NET short but did close some LONG positions and HEDGED some.
My longer-term position has not changed and still remains bearish, but this rally may last a bit longer, of course with oscillations on the way. |
