INDEX UPDATE
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Lets assume for this discussion that there was no announcement and the market is where it is at todays close.
The short-term technicals for all of the indexes are severely overbought and most of them are in CLASS SELL status.
The major overseas markets, assuming they will be up today, are all in the overbought/CLASS SELL status, with the exception of JAPAN which is in the mid-range.
Surprisingly, it appears that mainly the DOW stocks were the strongest beneficiaries of todays rally. Only the DOW,XMI,HFX,OEX(very close) were able to set HIGHER HIGHs today, but it is still a positive for the market. Most of the indexes are still in the position of setting LOWER HIGHs. So since the HIGHER HIGHs were set in the DOW and others, my conclusion is that for the short-term the bottom has been set at 7400. Untill more indexes can set Higher Highs, I feel that we are now back in a trading range at higher levels. For now I am suspecting a trading range of 8400/8500 - 7800/7700. I will need a few more cycles to confirm the range - it could be a bit higher or a bit lower.
Since most of the major markets are now overbought, I am still expecting a pullback to start within days, and basicly there is no change to my original timing of a pullback into next week, although I am not expecting a huge pullback. It should be a combination of flat and down days, with maybe 1 or 2 small up days.
The above was based on no announcement. With the announcement, we may still see some short covering tomorrow, but there is still alot of calls which may create an arbitrage situation for tomorrow to the downside.
I have turned less bearish, of course, but still not fully bullish untill I see more indexes set HIGHER HIGHS. What may be happening is a creation of another BUBBLE, but its too early to tell. Lets see if the forthcoming rallys are more broadbased than in the past, and how well the market internals recover.
I would guess that the PUT to CALL ratio will be heading in favor of the CALLS - I may be way off base on that one.
Seeya and good luck |
