INDEX UPDATE
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A little before 7:00 am the S$P Futures were down 8 points but right now they are up
6. If the futures have any relation to volitily then today could be a volitile day.
Europe was down big intraday but is now rebounding sharply. Germany was down
intraday about 9%, but now only down 4%. Similar action with France. It appears that
the European markets are starting a bounce to the upside which could last a few days,
but should retest the intraday lows of today after this forthcoming bounce, if it occurs.
Assuming there is a bounce I am suspecting that the retest of todays lows will occur
towards the end of next week or early the following week. In other words negative
pressure from the European markets in the near future, but give some positive pressure
early next week first.
Per my short-term technicals, almost all of the indexes are in the OVERSOLD region
except for the DOW. Most of the indexes in the oversold region are CLASS 2 BUYs
and just a few CLASS 1 BUYs. Per my system, a CLASS 2 BUY means that this
could be the bottom, but could go a bit lower to a CLASS 1 BUY status. So there is
still a little more downside left and if the market closes down today, the overall market
should be a CLASS 1 BUY for Monday, but a rebound could start as early as today.
My short-term reading for the DOW is 22, which is basicly at the OVERSOLD
LINE(20), but still has more downside room of 1-2 more days.
Of the indexes I checked, there could be more, the TRAN, XBD, RLX have already
set a major LOWER LOW, below the LOWS of Sept 1. The are an increasing number
of indexes which are close to setting NEW LOWS below the Sept 1 lows.
In light of that, I have changed my position that 7400 will not hold in the future. Even if
we do not pierce 7400 within this specific cycle, it should occur afterwards, as long as
the DOW does not hit 8200 on any nearterm bounce in OCT(which I dont think will
happen).
There is no strong support between 6975 and 7400, so if 7400 is broken by at least 50
points, the next target is 7000 range.
I am expecting a bounce to start intraday MON, but has a chance of starting as early as
today. Such bounce should last 1-3 days, then retest the recent lows and has good
probability of setting NEW LOWER LOWs accross the board. So Im targeting the
middle of next week (TUE/WED/THU) for the next downswing to start, if there is a
bounce today or Mon.
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