INDEX UPDATE
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Yesterday's pullback was confirmation of the reversal signals received the previous day. In light of the futures being up 3.5, now the question is will the pullback continue.
Under normal conditions, considering that my short-term technicals are still near the overbought line with the bias to the downside, it should continue down, unless there is some strong news to motivate the market to the upside. These are still not normal conditions.
If the market rebounds to the upside, do not feel that it will be able to set new highs across the board for the immediate interim, since the technicals will also become a CLASS SELL again. However, could see a few indexes like the DOW and MSH setting news highs, but it would not be across the board.
I had originally bought the OEX MAY 540 PUTS for 4.75 and attempted to sell them yesterday with a limit order of 8.75 but it never got that high. However to protect myself I sold the MAY 530's for 3.875; therefore my risk is now 87 cents to make approximately 10 if the OEX
is at 430 or lower by next Friday.
Per the 15 minute charts the OEX, SPX, DOW all have a HEAD AND SHOULDER FORMATION and we are now at the right shoulder. If they do follow the HEAD & SHOULDER then they should drop soon.
Just heard that the bond market will open up and it was suggested on CNBC that it may be due to more flight-to-safety action from Asian funds.
For the bigger picture, I still hold to my RANGE-TRADING-TREND due the divergence of some major indexes, as previously mentioned (XAL, TRAN, BKX, DRG, ETX).
For today feel that we will dip later in the day. I am not as comfortable with my original target of 9000-9050 in light of interest rates decreasing today.
Seeya |
