Donald Sew's Index Update:
JULY 10 INDEX UPDATE
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Short-term technical readings:
DOW - CLASS 1 BUY
SPX - CLASS 1 BUY
OEX - CLASS 1 BUY
NAZ - CLASS 1 BUY
NDX - CLASS 1 BUY
SOX - CLASS 1 BUY
RUT - CLASS 1 BUY
VIX - CLASS 1 SELL(inverse to market)
With the CLASS 1 BUY signals at today's close, the window is until tomorrow's lows.
Yesterday, the NDX had an IMPERFECT "DOWNSIDE TAKSUKI GAP", which worked nicely. I mention it since it is a bearish sign on an up-day when many may have been bullish.
The important negative is that the all the major indices mentioned above set a LOWER LOW, which implies that the DOWNTREND is still intact, at least for now.
As mentioned previously, I am not expecting a strong rally in light of the recent numerous technical negatives. The market should rally, just enough to satisfy the imbalances per the MAX-PAINs, in light of option expiration next FRI.
As of todays close the QQQ MAX-PAIN is at 44, and for the OEX, its at 630. Please keep in mind that I use a buffer of +/-5pts on the QQQ and 20-25pts on the OEX. In light of the MAX-PAIN, I feel that the downside is also limited.
Per my personal mutual fund accout, I closed all of my UOPIX(long-NDX) positions and am now 100% cash. In light of the recent negativity in the market, I decided not to go long, just take profits on my shorts. If there is no improvement in the market internals/rally weak, I will start adding small short positions when my short-term technicals reach the midrange, rather than wait for a CLASS SELL signal. |
