INDEX UPDATE
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Right now the futures are down strong, with fair value calculated, and the international markets are mainly negative, which is implying negativity for today. Just heard on CNBC that IBM is trading down 12 on instinet, which by itself would account for 50 negative DOW points.
My short term technicals are in the middle for the overall market and are in CLASS 1 BUY status for the INTERNUTs. With my technicals in the midrange I calculated the maximum downside of 2-3 straight down days before getting a CLASS BUY signal for the overall market.
The last dip took the DOW to 9100, and a significant break (50 points) of the 9100 support line will be a significant negative sign for the overall market. Since we hit the highs at 9650 the DOW produced a LOWER HIGH around 9480 on WED. A break of 9100 would be a LOWER LOW. That is not good. Since I calculated a time period of 2-3 down days to get to the extremes, such would imply that 9100 could be broken to the downside. Please understand that I am not saying that the market will go down for the next 2-3 days, but that for the market to get to the extremes it would take 2-3 days. Hey the market could rebound immediately, Im just making an if-than statement.
The INTERNUTs may now be turning into INTERDUDs. Many of the PARABOLIC SPIKEs in the INTERNUTs have already lost most or all of their gains. Im speaking just about the volume of the spike. Many of these spikes started in early JAN such as YHOO, AMZN. In the case of AMZN the price has already got lower than where the spike started.
I mention the INTERNUTs since I am a firm believer that once the mania in INTERNUTS starts its decline such will also have a negative effect on the overall market. Im not making a long term projection, but as BOLLINGER mentioned on CNBC, that statistically once a mania ends a bear market follows, he just did not say when.
Yesterday I got CLASS 1 BUY signals on the INTERNUTs, and they should start their bounce up either today or MONDAY. As I have mentioned before if the rebound in the INTERNUTS is late per my signals then that would imply that once the rebound does start it should be a weak one, which would imply continuing weakness overall.
Previously, I had mentioned that I got a CLASS 2 SELL signal a few days ago and the market reversed downwards quickly. As I have stated before if the selloff is early, the move is strong, when its right on time its normal, and when late its weak. So, since this sell signal was early it implies that this pullback could be a strong one. Normal pullback for the DOW is 400-600 points, and a strong pullback of greater than 600 points. I believe that since there was only a 2 day upswing from the previous lows at 9100, that this downswing is just a continuation of the pullback that started at 9650. So such also implys that 9100 could be broken to the downside.
I am not yet convinced that this negativity be as extreme as that of last summer after the JULY 20th peak. So once I get a CLASS 1 BUY signal for the overall market, if it gets to that extreme, I will go long on a trading basis to start with.
Seeya |
