INDEX UPDATE
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Futures up 8 right now, but according to CNBC fair cash value is +11, implying a little negativity at the open.
Do we get a rally before more selling starts.
From a non-technical point of view, theres just so much negativity in the markets right now. With yesterdays close, all of the gains of that great one day 380 surge on TUE has been given back and a bit more. Most of the foreign markets are down, and JAPAN down big closing below 14,000. The Clinton matter. Bazil's currency problems.
So will the good news from INTC and ORCL be able to rally the market.
I feel that some believe that yesterdays huge selloff was a BUY SIGNAL.
The VIX closed at 47.52 and some believe that is high enough to signal a buy, but what they may forget is that the recent high was near 53 when it gave the BUY SIGNAL previously. Many use absolute numbers which can be misleading since some believe that the VIX above 30 is a BUY SIGNAL. I prefer not to use absolute numbers, but watch carefully changes/rate of change.
Can the market rally today, sure it can, but can it last more than one day if it does rally. In the last 11 trading days there have only been 2 seperate up days. Frankly, I feel that any intraday rally today may not hold.
Technically, I feel that the bottom of this downtrend should arrive next MON/TUE/WED, and at this time I am leaning more towards MONDAY.
I'm not saying right now that it will get this low, but if the forthcoming bottom is above 6975 then this forthcoming rally should be quite strong to the upside, and will be stronger than the last 380 point rally, and should last a bit longer. Unfortunately, I feel that such rally will fail and will continue to set lower lows.
For now I have the trading range set at 7500-8100, but do not feel it will last long in either direction. Unless the market breaks 8600 to the upside, technically the DOW will still be in a TRADING RANGE TREND. Of course we could also break tieh 7500-8100 trading range to the downside.
Yesterday we broke the support line at 7650. The next support lines are at: 7500, 7400, 7350, 6975. Since my charts dont go far enough back I am unable to locate a support line between 6975 and 7350, if there is one. |
