INDEX UPDATE
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The rebound in the NAZ yesterday has many optimistic that this pullback is over; however I feel that is premature to make that conclusion yet. Until the recent peaks are taken out to the upside this pullback, consolidation period is basicly not over. Please keep in mind that markets dont always go straight up and down and to make a decision on 1 days performance, may not be that successful. Since my short-term technicals are smack in the middle the market can go in either direction.
EUROPE is up slightly and the futures were as high as 9 this morning, but when the fair value is calculated in it is up around 3-4.
My short-term technicals for the overall market is smack in the middle, and I calculated that on the basis of time it can go 2-4 days in either direction to become either overbought or oversold.
I have previously indicated that JAN 17 was the 55 day FIB TOP-to-TOP. It is possible that we get a retest of the recent peaks and if it fails to pierce the resistances formed by the recent peaks to the upside, such would form a mini-DOUBLE-TOP implying negativity. Many may feel optimistic if we continue to move up, but my belief is that if we do move up some but do not exceed the previous peaks and form a double top, such is a stronger negative signal. Double tops, even mini-DOUBLE TOPS imply stronger pullbacks. So I feel optimism should not start untill the peaks are taken out, since only a retest of those levels would imply a stronger pullback.
For those wanting to play the short-side, a DOUBLE-TOP formation would be a good opportunity to initiate puts, if it gets back that high.
Since my short-term technicals are smack in the middle the market can go in either direction.
On a intraday basis, many of the indexes including the NAZ broke their lower trendlines to the downside yesterday. It is my belief that those levels could be retested and exceeded to the downside during this consolidation period. Again, if the previous peaks are pierced to the upside then this pullback is over.
Seeya |
