INDEX UPDATE
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Per my short-term technicals, it is indicating TUE/WED to be the top, with the pullback starting latest Thur, as I indicated earlier.
For the heck of it I really went short-term and did an analysis on a 30 minute chart starting from mid-MARCH. I noticed a DOUBLE-TOP formation on FRIDAY, indicating that the pullback could start as early as Monday. I would actually be surprised not to see 9000 on a closing basis next week - boy that would disappoint all those CNBC folks.
Previously, I indicated that the SOX was forming a CUP & HANDLE chart and that the right side needed to get to the 320-330 range. Well it only got to 315 and started showing its weakness almost immediately, which is simply giving further proof of its weakness.
The bottom of this CUP (recent base) is in the 282-285 range. Since the SOX never got to the RIM in the 220-230 range, it is very likely that the SOX can revisit the 282-285 range during the next pullback.
In light of that we should see such or close to it by April expiration.
As for going lower, that is quite likely since the HIGHS are getting lower, however that may need more time than April expirtation and could see such in May's cycle.
Simply put - the SOX is technically the weakest index and will be one of the leaders to the downside. However the downside is less than all the other indexes, since it has performed so lousey already.
My choices for PUT candidates are:
SOX (of course)
XCI
MSH
IIX - starting to weaken
XAL - need to watch the price of crude carefully
The internet stocks are finally starting to show some weakness (AOL,YHOO), but does need more confirmation. AOL had a EVENING STAR followed by a HAMMER - pretty strong reversal signal per candlestick talk.
Seeya |
