JULY 6 INDEX UPDATE
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Short-term technical readings:
DOW - oversold
SPX - oversold
OEX - oversold
NAZ - oversold
NDX - oversold
VIX - overbought(inverse to market)
Per my short-term technicals the overall market is in the overbought region and if it continues down I would get CLASS 2 BUYs on MON and CLASS 1 BUYs on TUE, with the window until WEDs lows.
I also have a 34-DAY CYCLE LOW arriving on JULY 11, next WED. Not saying that it will be an important bottom, could be just a short/mid-term bottom. I consider 55 day cycles more substantial.
Sorry, but there were a significant number of negative issues recently:
DOW - created a LOWER LOW, and completed another cycle of a LOWER HIGH/LOWER LOW, which implies DOWNTREND
SPX - created a LOWER LOW
OEX - created a LOWER LOW, and completed another cycle of a LOWER HIGH/LOWER LOW
SOX - created a LOWER LOW on a closing basis, but not on an intraday basis. As mentioned for months, the SOX has been a reliable leading indicator for the NAZ/NDX.
VIX - created a slight HIGHER HIGH. It needs a bit more confirmation, but for now its hintine that the trend for the market may be changing to the downside, especially if the VIX creates cycles of HIGHER HIGHs/HIGHER LOWs(inverse to market)
The NAZ NET NEW HIGHs-LOWs continued into negative territory closing at negative 58. Last week it was above 200, although it got that high partially due to the RUT rebalancing. If it continues to decline - thats not good.
If the SPX/OEX sells off hard on MONDAY and closes at/near the intraday lows, then there is a good chance for a "3-BLACK CROWs". As mentioned often, it is not uncommon that immediately after the 3-CROWs are formed that there is a small rally before the selling resumes/intensifies, and of course it could also just go straight down.
As for the NDX, in just 2 days it was able to break below 6 support areas. Such ease of breaking so many support areas so quickly, even if some were minor, is negative:
INCLINING TRENDLINE off of 6/20 LOW - around 1790
1785 - 38% FIB RETRACEMENT off of 6/20 rally(1655-1865)
1780 - NECKLINE of HEAD & SHOULDER
1755 - GAP SUPPORT on 6/21
1735 - 62% FIB RETRACEMENT off of 6/20 rally(1655-1865)
INCLINING TRENDLINE off of IMPORTANT 4/4 LOW - around 1710
Here are the some more support areas for the NDX:
1655 - 6/20 TROUGH
1604 - MINOR HORIZONTAL SUPPORT
1481 - GAP SUPPORT on 4/9
1470 - APPROXIMATE MEASUREMENT of HEAD & SHOULDERS
1426 - MINOR HORIZONTAL SUPPORT
1392 - GAP SUPPORT on 4/4
1348 - 4/4 MULTIYEAR LOW
Im not one who uses PRICE TARGETs alot, since I mainly focus on time, but Im guessing that the NDX has a good chance of setting a LOWER LOW below the 6/20 TROUGH, at 1655, with the the the support areas between 1604-1481 holding for some sort of a short-term bounce.
In light the negativity, I suspect that the fortcoming short-term rally should not be strong creating another LOWER HIGH.
As for MON, we have the FRIDAY-MONDAY EFFECT, which implies that Monday has a good probability of either being DOWN or FLAT.
Im still holding onto my small SHORT position in the USPIX(short-NDX), with 90% cash. Should have gone short more, OH WELL. I suspecting/planning to close my short positions in the TUE/WED timeframe, and possibly as early as MON.
seeya |
