MAY 18 INDEX UPDATE
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Short-term technical readings:
DOW - borderline CLASS 1 SELL
SPX - CLASS 2 SELL
OEX - CLASS 2 SELL
NAZ - OVERBOUGHT/borderline CLASS 2 SELL
NDX - OVERBOUGHT/borderline CLASS 2 SELL
VIX - borderline CLASS 1 BUY(inverse to market)
Per my short-term technicals the overall market is entering CLASS SELL territory. If the market continues up the DOW/SPX/OEX would become CLASS 1 SELL signals tomorrow, and the NAZ/NDX on FRI/MON. The short-term technicals on the VIX are also lining up. Im leaning more towards MON for the pullback to start, although it could start as early as tomorrow.
Well gold is breaking out, but Im also getting CLASS 1 SELL signals on the WEEKLY and DAILY charts. In light of the recent bullishness, I am not suspecting a strong pullback, just a dip that should be a buying opportunity. Originally, I had 3 positions in HM, and yesterday I closed one and today I closed another, and holding onto the last one in case I dont get a good opportunity to buy-back in.
Previously, I mentioned the DESCENDING TRIANGLE on the VIX which did break to the downside, which was bullish for the market. The VIX is still in a downtrend which is also bullish for the market.
In light of the good market internals, downtrend in the VIX, recent bullish action in the market, and bullish chart formations(INVERTED HEAD & SHOULDERS/RECTANGLES) I feel that the forthcoming short-term pullback may only be normal/small in size, and another short-term buying opportunity.
Although I am a little bullish/less bearish for the mid-term, Im still bearish for the longer-term. I would not be surprised if the market rallies higher than most expect, which still would not change my longer-term bearish view.
If the overall market continues up tomorrow, I will close most of my UOPIX(long-NDX) positions in my mutual fund account, and may enter a small short position to play the short-term swing. In my trading account still have 1 position in HM, and still holding a biotech and a smallcap. As for the straddle on the QQQ, may also close the CALL side tomorrow if the NDX is up enough, in light of the possible CLASS SELL signal. |
