JG
I guess we can call this an index update. The following recap is based on short-term technicals, which normally is set to predict movement of only 1-5 days.
CLASS 1 OVERBOUGHT
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OEX - BORDERLINE
SPX - BORDERLINE
PNX
DRG
XOI
BKX
XAL - BORDERLINE
RUT - BEEN TECHNICALLY BREAKING OUT
CLASS 2 OVERBOUGHT
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IIX
XCI
BTK
MIDRANGE = MORE UPSIDE ROOM WITH UPSIDE BIAS
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DJ30
NDX
SOX (BASICLY THE LAGGARD OF THE WHOLE OVERALL MARKET-WORSE THAN DJ30)
MSH
TYX
If the CLASS 1's mentioned above continue to move up substantially then such action would be considered SHORT-TERM TECHNICAL BREAKOUT. What I categorise as TECHNICAL BREAKOUT is that the instrument has gone out of the range of my SHORT-TERM TECHNICALS and my short-term analysis is basicly of no use. To determine whether it can move up further, I need to revert to my MID-TERM TECHNICAL ANALYSIS which uses different combinations of technical indicators and is much less accurate than my short-term analysis.
In this market the CLASS 2's still have room to the upside.
Ok what does all this junk mean - The market is overbought, BUT only for the short-term.
GUITAR - analysis of divergences(short-term)
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As long as the TYX/INTEREST RATES continue down it will help keep and maybe even still pull the market up even more into the realm of SHORT-TERM TECHNICAL BREAKOUT. If the rates remain about the same the OVERSOLD indexes should be topping out for ONLY the SHORT-TERM.
MID-TERM ANALYSIS (5-30 days)
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This market is on a roar. Long positions should be opened on dips. This is not the time for PUTS, unless the most nimble of the day-traders are just looking for a small dip in the indexes. Frankly speaking, this market is screaming, on a technical basis for the longer term, unless there are negative fundamental changes IE: interest rate increases, poor earnings,etc. For those who are familiar with my GUITAR - it is definitely strumming.
Sorry if I appeared pompous and hope I did not bore too many.
Since I am new to this thread, I am purely a technical analyst and do not consider fundamentals, although I live with the principal that the fundamentals over-ride the technicals if the fundamental change is substantial enough. |
