OCT 2 INDEX UPDATE
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Short-term readings:
DOW - still CLASS 2 SELL/borderline CLASS 1 SELL
SPX - "
OEX - "
NAZ - midrange
NDX - midrange
SOX - lower midrange
VIX - pending CLASS 1 BUY(inverse to market)
As mentioned in the past, I am more confident in a CLASS signal if all the major indices are in line. Regardless, I cannot totally ignore the CLASS SELL signals in the DOW/SPX/OEX.
If the market moves up today I will get CLASS 1 SELL signals in the DOW/SPX/OEX with the window until the next day's highs. As mentioned often a closing signal is more reliable than a intraday signal.
Of course, the FOMC meeting is today. Im a firm believer that news/fundamentals can override the short-term technicals.
I did not like the recent weakness in the SOX, which lagged the NAZ/NDX. Also, my short-term technicals in the NAZ/NDX are in the midrange, and as mentioned often, midrange readings are in the "flip-of-coin territory". In light of these factors which made me uncertain of market direction, I evenly hedged my previous UOPIX(long-NDX) position in my personal account. I did not do it for our mutual fund account since I was gone yesterday afternoon and did not get back until late at night.
The recent low in the NDX was 1089(intraday)/1127(closing basis). Yesterday the NDX closed at 1151, just 62 points above last week's intraday low and only 24 points above that closing low, while the DOW is up about 800 points. So its very fair to say that the NAZ/NDX is lagging the DOW. Unless the NAZ/NDX can light a fire and catch up, it just doesnt look great. If the NAZ/NDX cannot rally with some mustard, unfortunately that would eventually set another LOWER HIGH, implying that the DOWNTREND is still intact.
Having said that, the NAZ NET NEW HIGHs-LOWs only declined slightly yesterday and is significantly above last week's lows, which is really not supporting such a weak NAZ/NDX. Just makes it that much harder to determine short-term direction for the NAZ/NDX - another reason why I evenly hedged my UOPIX(long-NDX) position.
Since I am fully hedged in my mutual fund account, my strategy is to not make any trades until after the FOMC meeting today. Hopefully I will get better clues to short-term market direction within the next few days or even as soon as today's close. |
