AUG 21 INDEX UPDATE
-----------------------------
Short-term technical readings:
DOW - CLASS 2 BUY
SPX - CLASS 2 BUY/BORDERLINE CLASS 1 BUY
OEX - CLASS 2 BUY/BORDERLINE CLASS 1 BUY
NDX - CLASS 1 BUY
NAZ - CLASS 1 BUY
SOX - CLASS 1 BUY
VIX - midrange/borderline upper midrange(inverse to market)
USD - POSSIBLE NEGATED CLASS 1 BUY SIGNAL
NAZ NET NEW HIGHs-LOWs = NEGATIVE 23
If the market was to continue down tomorrow, I would get CLASS 1 BUY signals across the board, with the WINDOW until THUR's LOWs. Just want to explain that once I get CLASS 1 BUYs across the board, the market could still continue down into the next day. However, I only got a midrange/borderline upper midrange reading on the VIX which is giving the hint that the selling could continue about 1-2 days longer than the near CLASS 1 BUY SIGNALs on the major indices. I need to watch that carefully.
We are still getting LOWER LOWs. An important but slight LOWER LOW was set today in the SOX on a CLOSING BASIS but not on an INTRADAY BASIS. Lets keep in mind that the SOX recently was the area of strength for the NAZ/NDX but with today's LOWER LOW, even though its just on a closing basis, is a strong hint that things just ain't looking good for the NAZ/NDX.
Another important NEGATIVE DEVELOPMENT is that I got a NEGATED CLASS 1 BUY SIGNAL on the US DOLLAR. As mentioned previously, a NEGATED BUY SIGNAL means that the index is/can go lower than expected and that my short-term technicals are of no use on that index. Specifically per my short-term technicals it's a technical breakdown. A NEGATED CLASS 1 BUY could reverse upwards at any time or could just continue to tank. If the US DOLLAR continues to drop significantly - that just ain't good for the US MARKETs since it could continue to motivate foreign money to leave the US MARKETs. Again, this just ain't good.
Although we have significant NEGATIVE DEVELOPMENTs, that doesn't mean that the market cannot bounce to some degree; however I suspect that any rally could be short lived.
Lets keep in mind that we are approaching the END-of-MONTH RALLY time, with only 7 more trading days before SEPT. With my short-term technicals this low, Im suspecting that a bounce could start WED/THUR and continue into next week, but I just not expecting it to be strong. More like a series of smaller oscillations with a slight incline.
After this possible END-of-MONTH RALLY, we will be in SEPTEMBER which is statistically the worse month in the year for the SPX. Not that I like to use subjective issues, but I cant ignore the FEAR that is associated with SEPTEMBER/OCTOBER. Just ain't looking good.
As mentioned previously, its interesting to note the the selling is starting a bit early and didnt wait for SEPT/OCT. Im not expecting a strong rally shortly, as mentioned above, but if we dont get some sort of significant rally, this market could get real ugly with SEPT/OCT around the corner. |
