OCT 22 INDEX UPDATE
----------------------------
Short-term technical readings:
DOW - upper midrange
SPX - midrange
OEX - midrange
NAZ - midrange
NDX - midrange
NAZ NET NEW HIGHs-LOWs = POSITIVE 6
NYSE NET NEW HIGHs-LOWs = NEGATIVE 7
As mentioned often, when my short-term technicals are in the midrange it is in the FLIP-of-a-COIN region. If the market was to continue straight upwards from here, I would get another CLASS 1 SELL signal in 2-3 days, and if it was to move straight down from here, I would get CLASS 1 BUY SIGNALs in 3-4 days(just approximations based on straight moves, without oscillations).
As bullish as today was, the market has not yet broken above last weeks high, which was a short-term top. Until that occurs, I will remain in my "heck if I know" mode.
I am getting both positive and negative hints. Starting with the NEGATIVE ISSUEs:
1) NYSE NET NEW HIGHs-LOWs was NEGATIVE 7, on a day when the DOW was up 173. One can fairly say that the HI-LOs on the NYSE was not supporting todays rally. That doesnt mean that Im predicting that the HI-LOs will continue down, but I will say with confidence that if the HI-LOs do deteriorate, while the DOW moves up more - that would be a significant hint that this rally does not have legs
2) The volume on the NYSE declined from last FRIDAY's volume, while the DOW closed up 173 points. Also todays volume was only about 55% of last weeks be down day. Again, the volume is not supporting the rally, but that doesnt mean that it cant chance. But as with the HI-LOs, if the volume continues to deteriorate as the DOW moves up - another hint that this rally does not have legs.
3) The volume on the NAZ and QQQs were down slightly from FRI's volume, and about 60% of last weeks BIG BLACK CANDLE DAY. Similar comments as with the NYSE.
POSITIVE ISSUES:
1) Positive seasonality. Its common that an important bottom arrives in OCT. Im not saying that it is the MAIN BOTTOM, just dont know yet.
2) If the bottom of last weeks big candle was a short-term bottom, then that would mean it produced a HIGHER LOW, which would be bullish, but requiring confirmation with a HIGHER HIGH.
3) The possible DOWN 3-DAY PATTERN had no follow-thru, which could be a bullish hint.
4) From my analysis on BIG BLACK CANDLEs on the NDX greater than 100 points/arriving at/near short-term tops, the follow-thru to the downside occured within 2 days after the BIG BLACK CANDLE. This is already the 3rd, which could also be a bullish hint.
I made no trades today in light of the mixed signals, which is also common when my short-term techncials are in the midrange, as was intuitively noted by a friend. |
