INDEX UPDATE
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Right now my short-term technicals are at 45 already which is smack in the middle again with a downside bias. As I have indicated in the past, whenever the technicals are in the middle, the market is the most suseptible to news/fundamentals, and even though the bias is to the downside, it could reverse on the spot. This is the time which is the hardest to determine direction.
From just a mathematical calculation the downside potential has been reduced to only 300-600 points for my short-term technicals to get severely oversold(CLASS BUY). Such is implying that the current downswing may not pierce the 7400 support if it even gets that low.
Previously, I indicated that this downswing will last 4-6 days in totals; therefore there should be 2-4 days left to this downswing. I am suspecting that if we do continue down the bottom should occur TUE/WED/THU, with the reversal to the upside to start WED/THU/FRI. By Monday should have a better idea.
As for a target, at this time the 7600-7700 area could possibly be the bottom of this short-term downswing. If 7650 is broken convincingly, by more than 50 DOW points, then that would imply that we could retast 7500 again. So for now, I feel that the 2 bottom targets for this downswing are 7650 range and 7500. Now if 7500 does not hold, if we get that low, then the market is in trouble.
If we rebound at 7650 range then that would imply a HIGHER LOW, and that the following upswing could retest 8100 and break it to the upside. If the rebound starts at 7500 then it would confirm that we are range trading for the short-term in the 7500-8100 range.
If 7650 range holds then an ASCENDING TRIANGLE may be forming, which is a positive for the market. However, on the opposite side, with just as much importance or more, is that the the 50 day moving average pierced the 200 DMA to the downside on THUR. The 200 DMA is at approx 8550 and the 20DMA at 8500(heading down).
The short-term technicals for the Japan market is now in the lower mid-range around 30, with no clear bias in either direction. Of the last 15 trading days, 8 of them touched or went below the important support line of 14,000, so it appears that it is trying very hard to form a base there. I suspect we could see an upward swing the Japan market next week sometime. If Japan continues to bounce up Sunday night, this could have a positive effect on our markets.
TIME FRAME:
1) Downswing to continue for 2-4 more days with DOW target of 7650 range or 7500.
2) Upswing to start in the middle of next week which should last about 4-6 days, which could retest 8100 or break it to the upside with maximum of 8300.
3) Top of upswing to arrive around the end of SEPT, early OCT, for now say SEPT 30-OCT 2, and downswing to start. This downswing could be the critical one. Just on a psychological/subjective basis, OCT has quite a bit of negativity. Of course we have the fresh memories of last OCT, and the 87 crash.
NOTE: If MON/TUE are up and not down, the time frame will just move forward about 1-2 days, and the upswing targets of 8100 & 8300 should still remain intact. If 7500 does not hold, everything changes.
Seeya |
