AUG 2 INDEX UPDATE
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Short-term technical readings:
DOW - overbought/borderline CLASS 2 SELL
SPX - overbought/borderline ClASS 2 SELL
OEX - overbought/borderline CLASS 2 SELL
NAZ - overbought/borderline CLASS 2 SELL, imperfect DRAGON FLY DOJI
NDX - overbought/borderline CLASS 2 SELL, imperfect HANGING MAN
SOX - still NEGATED CLASS 1 SELL SIGNAL
VIX - pending CLASS 1 BUY(inverse to market)
Still no CLASS 1 SELL signal on a closing basis. If the market continues up and closes near/at the highs I would get firm CLASS 1 SELLs, and it doesnt even have to rally alot.
The SOX still has the NEGATED CLASS 1 SELL SIGNAL, which is very bullish, but the other major indices are not yet following in line with the SOX.
As mentioned previously, MSFT is still lagging, and the same for GE. I still feel that the performance of MSFT and GE are important factors in supporting a big rally, but for now they are not helping.
On the SPX and OEX, there are 3 days in a row with INVERTED HAMMERs. An INVERTED HAMMER is where there is a rally intraday but closes towards the lows/ 1/3 mark, saying that the intraday rally could not hold. I am not aware of a formal name for this type of pattern, but I would put this type of pattern in the same category as a TRI-STAR.
Also the NAZ/NDX had imperfect negative candles with the HANGING MAN/DRAGONFLY DOJI. Just some candlestic hints of a short-term top, but does require confirmation.
As mentioned earlier today, I feel quite negative about the following pattern:
stockcharts.com
Its appears to be forming a RISING WEDGE(bearish implications), since early JUNE. Im not predicting, but a downside break in that WEDGE could become an very significant negative for the NAZ/NDX. Often the NEW HIGHs-LOWs are a leading indicator and can lead the market by weeks and even months. If this indicator breaks to the downside with the market still rallying to some degree - that would be an idea setup to short the market. I feel strongly that this indicator needs to be watched carefully. For now the NAZ NET NEW HIGHs-LOWs are still in positive territory, but not improving with any significance.
I added another small USPIX(short-NDX) position today where Im now about 87% cash in my personal mutual fund account, and also added to out website account. |
