INDEX UPDATE
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Subjectively the market looked tired today.
Except for the DDX, which was up slightly, all of the other HiTech indexes were down (COMP NDX MSH XCI IIX YTK CWX etc). If one considers the high for the day, the COMP was down 20 points off of its highs and if one uses a 5:1 ratio, thats 100 DOW points, and the NDX was down 25 points off its highs.
Another thing is that the RUT and the EGI, broader based indexes were also down. And keep in mind that the DOW was about 50 points off its lows.
Is that all for the pullback? I feel that it should go down just a bit more this week, maybe 100-150 DOW points off todays close, but it just may be on a intraday basis - this market is so strong. The probability is that further pulling back should happen this week latest next Tuesday.
As for existing PUTS, Im just doing damage control, but now my focus is to pick that window of opportunity to get back in on the long side. There is a chance this window of opportunity may appear in the form of one large down day, say the 100-150 point drop, and then thats it, back to the upside.
As for the news over the next 2-3 weeks, I am not sure that an airstrike on IRAQ will have that much negative effect. I suspect that a airstike will push the price of CRUDE up, at least for the short term, which should help the OILS. There are 3 OILS in the DOW which is 10% of the DOW, so that could help the DOW. Another subjective thought is that in light of an attack on IRAQ for some time now, there has not been that much negative effect on the market. Would the market interpret a stike on IRAQ as a quick resolution to a problem - and one less thing to worry about. Im not sure, just a thought.
Seeya |
