INDEX UPDATE
------------------------
Right now my SHORT-TERM TECHNICALS on the DOW closed at 40, which is right in the middle and implies that there is still plenty of downside. Made a mathematical approximation per my technicals that for them to get to 5 which is a CLASS BUY tomorrow the DOW would need to drop 400-600 points. Its only a mathematical calculation and not to imply that it will drop that much tomorrow.
As I have indicated so often in the past, that when my ST technicals are in the middle, it can go in either direction and is very susceptible to news/fundamental changes/etc.
I want to comment what was stated on CNBC that we are forming higher lows. That is correct per todays performance assuming that we dont go down tomorrow, but do they have a crystal ball. BOY-OH-BOY, we had a drop of 250 points and they are trying to put a positive spin on it.
We broke a support line at 8650 and one could say that we retested 8500, since we came within 25 points of 8500. But to assume that the downtrend is over - lets just say there is far from enough technical confirmation of that. Also they are assuming that todays selloff, because of the size is a short-term bottom - that should also not be assumed, not just yet. To confirm that we are heading up from todays lows the DOW needs to first pierce todays highs(7865) to the upside. On a technical basis, even if we close up tomorrow, but stay below 7865, it will just mean the just range trading for the immediate period.
Statistically, per my short-term technicals, a specific downswing in a downtrend has a cycle life of approximately 6-10 days, and that will vary depending on the size of the decline. That does not mean that every day is down either. Lets take the reverse during the strong uptrend of JAN-MAR. The short-term downswings only lasted 1-2 days, and sometime only intraday, but the upswings lasted much longer around 6-10 days. Any resemblance here. One big day up on TUEs, only to head down on WED and today.
This downswing which started on WED is very unlikely to be over.
For the Fibinocci fans. The top of this market occured on 7/20 when the DOW had the intraday high of 9367. Heard that some were saying that today is the 55th day, but that is wrong since they are using 7/17 as the high. Counting 55 days it will be SEPT 13 which is Sunday, so the likelihood is MONDAY.
The strong probability is that the DOW will retest 7400 within days.
Right now most of Asia is down, and JAP down over 3%. YES YES I know it can change. HK is not open - is it a holiday (darn people over there always on holiday ggggggggggg).
Seeya |
