To: Casaubon who wrote (168 ) 2/17/2000 1:06:00 PM From: donald sew Read Replies (1) | Respond to of 428
On a intraday basis, as of 12:30, the NAZ just set a new high by about 5 points. What is interesting to note is that the NDX still about 50 points below its all-time high. At that moment I also got a CLASS 2 SELL signal on the NAZ, but not the NDX. Keep in mind that the NAZ can either reverse right from that spot or could morph into a CLASS 1 SELL signal, if the NAZ continues higher another day. So the NAZ/NDX are lining up nicely with my CYCLE TOP of FEB 18. Now heres the problem. The DOW is in the lower mid-range and the SPX is already in the oversold region. Many could easily argue that the DOW and SPX are closer to a bottom than any sort of a TOP, which I also agree with. So how the heck do we explain that in light of the NAZ lining up nicely with the FEB-18 cycle top. Statistically, these cycles to invert about 20% of the time, so it is possible that the this specific cycle is inverting and that the DOW/SPX will rally. If that is the case, then what happens to the NAZ/NDX. Will the possible rally in the DOW/SPX also push the NAZ/NDX higher, or will the money rotate out of the NAZ/NDX to fuel the possible rally in the DOW/SPX. I also cannot ignore the possibility that this CYCLE will not invert and the DOW/SPX goes lower and the NAZ/NDX also declines. Lee has express concerns of the NAZ/NDX possibly going much and blowing off, and I cannot ignore that possibility. As for trading our mutual fund account I will remain bearish until the NDX sets a new high, keeping in mind that our account is hedged, although weighted to the downside. If I get a CLASS 1 SELL signal in the NDX in the next 1/2 days, without a new high I will just short as normal by closing out the UOPIX position. If a new high is set, I will need to re-evaluate it at that time.