Watch out for NDX.X made intraday new high for the year, a possible break out, SOX looks like building a base around 275 level and holding well, 1130 on SPZ also held for last three days.. After few days of pressure ASEAN markets are coming back up very nicely bouncing off intermediate supports, CPI and PPI are next few economic numbers which will certainly define the market move precisely.. BKX had one close below 760 I expect it to bounce of from here otherwise we will see 700 being tested that would keep DOW and SPZ under pressure, Techs without financials alone and even nifty fifties are unable to take the broad indicator higher, the most interesting thing about this market is that on one hand we have interest rate cut possibility keeping a floor below the market and second that although major indicators look like going nowhere but INTC MSFT and AOL DELL are on fire with small cpas firmly building a base to assault the 402 level we are seeing a nice feel good factor as market shows broad affect of the move it is unlike June move where we had this trickle down affect benefitting few accounts only, small cap moves is always considered as a smart money moves it comes but small cap move is always a smart money move -- late but its affects do not disaapear over night this in right kind of economic environment can move 140 points higher from here by mid 1999.
I would consider that once we hold these supports which are tradionally important our indicators look like ready to move on it is clearly visisble that SOX 330 target shall be possibly met so would the DDX 215-- PSE will move up to new highs if these indexes stay on course..My defensive proxy for this market would be to purchase some puts on specific high flying sectors and bet on long side on sectors which are laggards..One needs to fully appreciate the market potential if INTC MSFT IBM start making these new projected highs..
1130 support on SPZ and 402 resistance on RUT are two important indicators and I am watching them carefully,with best of ones bullishness one needs to watch the supports very carefully however once 1155 is taken out we move up to 1180 very quick the SPZ will even diverge from DOW like NDX has moved much faster than composite, SPZ being loaded with most of these fliers will move faster it cannot stay here if NDX is making new highs one has to adjust my bet would be SPZ moving higher not NDX coming lower..
Yesterday, I expected them to soften this support to even 1024 level but the 1028 level was held.
It is interesting to see that some of these uptrending charts are looking good although they are making new highs and healthy configuration all around unlike last time when the whole market move was carried by few stocks, this time we have 100 top stocks doing really well IBM and INTC targets have been moved up to 180 and 115 levels that has led NDX.X disproportionately higher in comparison to composite, the evidence of that being although we are still 10% shy off composite all time high we had two attempts intraday breaching 52 week high on this sensitive indicator, it has always been a very good forward indicator and have represented moves up very nicely, like NDX.X was the first index which gave the long term signal when 13 days crossed the 50 days also this was first indicator where 50 days crossed the 200 days MA, it is also the first to reach the 52 weeks high, with 1130 SPZ one can argue that NDX>X IIX making new highs may show sign of retreat as BKX remains under pressure, what is distinctive this time which shows still strength in this move is the small cap rally, we never had this last time if other than RUT 2000 we look at obscure indicators like Wiltshire and RUT 3000 you would see that last time we had this NDX.X at 52 week high these other indexes showed a big divergence they were just not moving in the same direction. That was on huge drag now in absence of that one needs to fully appreciate the potential of this move..
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