JUNE 13 INDEX UPDATE
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Short-term technical readings:
DOW - oversold region
SPX - oversold region
OEX - oversold region
NAZ - oversold region, borderline CLASS 2 BUY signal
NDX - oversold region, borderline CLASS 2 BUY signal
VIX - CLASS 2 SELL signal(inverse to market)
5-DAY TRIN - 6.15, 3 days in a row over 6.00
Per my short-term technicals the overall market is in the oversold region, and if the market continues down I will get CLASS 1 BUY signals in 2 days, with a chance as early as tomorrow. The VIX and 5-DAY TRIN are also lining up with the short-term readings in the indices.
Yesterday's candlestic pattern, the "ON-NECK" appears to have a chance of working, with the small pullback today. Its an interesting candlestic pattern, since it bearish but normally comes after a significant intraday rally forming a WHITE DAY where sentiment may be bullish. I didnt say it will work for sure, since it could still get negated, but for now it is hinting that it could work as long as any rally from here is small.
There are many negatives which are developing:
1) Stephan noticed the bearish DIAMOND FORMATION on the NAZ
2) Paul mentioned the PUETZ CYCLE
3) The huge number of HEAD & SHOULDERS in both indices and individual stocks.
4) I have a 55 DAY CYCLE BOTTOM arriving around JUNE 22.
Concerning the HEAD & SHOULDERs, I have the following indices breaking below their NECKLINE:
SPX
OEX
IIX
NWX
DOT
Sorry, but that aint good. That doesnt mean that the market cant rally some, but in light of these NECKLINEs breaking Im more inclined to sell the rallys and stay away from the long side untill these negative patterns get resolved.
In light of my short-term technicals being 1-2 days from a CLASS 1 BUY signal, I still feel that the overall market will bounce a little first before the heavy selling starts, rather than selling off hard right from here. In my personal mutual fund account I am already biased to the short-side as of yesterdays close, and if there is a bounce I will add more shorts.
As mentioned a week or so ago, I still feel that the week after expiration is a CAUTION PERIOD, and from the looks of it, it may be coming alittle early.
EDIT: forgot to mention that the DOW also closed below the NECKLINE of its HEAD & SHOULDER. |
