Monday, December 19, 2005

Hourly sell on all the indices



















The hourly went on a sell on all the indices today - DOW, SPX, NDX and RUT on both momentum and trend basis. There were no-brainer setups to go short today, if one followed the 15-min charts. Here we are in a seasonally bullish period and technically awful looking markets.

The e-wave count on NDX got invalidated as soon as we broke below the lower trendline of the triangle. That's why it pays to watch the momentum indicators and not get married to the wavecount. The 120-min on NDX tells the story for today, which is extremely oversold. A -300 reading on the CCI(20) and it has hooked back above it. The Full Stoch is almost oversold.

The daily on the NDX suggests two possibilities, either a slingshot reversal from here or a trip to 1640-1645 where it meets the 60 EMA, just to get everyone beared up and another attempt at nominal highs. If we were to make any nominal new highs on the indices here, the upmove have to be swift i.e a slingshot kind of move. Instead if we churn sideways after the decline, the bear has started....


The daily CCI on the SPX is right near the zero line, where a reversal can start anytime. I am not too beared up on DOW and SPX at this point as far as swing trading is concerned. Both are right at the support zones. If we fail here, then 1240 (SPX) and 10680 (DOW) would be next major support zones.

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