INDEX UPDATE
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NAZ - the rate of incline for the last 3 days in the NAZ and HiTech indexes (NDX, IIX, XCI, EGI, MSH, ETC) has been one of the steepest if in the steepest since this rally began in JANUARY. For example the NDX climbed about 64 points in these 3 days. Using a ration of 7:1 to compare the NAZ to the DOW - that 450 DOW points. I believe that we may be seeing a blowoff top in the NAZ.
DOW - for the last 6 days the highs of each day has been within 50 points of each other:
4/15 - 9163
4/16 - 9166
4/17 - 9167
4/20 - 9172
4/21 - 9194
4/22 - 9213
The NAZ has been overbought and a CLASS SELL for the last 3 days per my short-term technicals but it kept on going up. Mathematically the technicals can not get any higher per the parameters I have set up, so it is easy to conclude that the NAZ technically brokeout over the last 3 days. With a technical breakout, it is very hard to predict when it will end, it can be immediate
About 3 weeks ago, I had indicated that my technicals were getting back to good predicability in reference to time, but with the action of the NAZ that has been negated. However, my technicals have been accurate with the DOW. Keep in mind that I am not talking about price movement, but timing. So how do I interpret such action. The only way is to say extreme SECTOR ROTATION.
OK, if it is sector rotation, how do we then locate the interim top. The technicals on the NAZ are at maximum levels, but the DOW's short-term technicals are only borderline overbought, which means that the DOW, just on a technical basis still has some upside room. Howver, what about the extreme action in the NAZ, which could be interpreted as a blowoff top.
Can we have a blowoff top in one sector only before a pullback for the overall marekt. Of is this sector blowoff top just another phase in sector rotation, and the NAZ to remain relatively flat as other sectors attempt to catch up pushing the overall market up further, without having any small correction at all.
Per my earlier notes, it was indicated that today would have the best chance for the overall market to be weak, and should last till the early next week, say 3-4 days.
The futures are now down and so far it does look weak. If the market overall does pullback will it only last 1 day or will it turn to something larger. After contemplating the blowoff top senerio in the NAZ I am now leaning towards the possiblility that if a pullback starts today it will not end immediately.
Also watch the interest rates - they are creeping up.
Seeya |
