ajtj99's Market Pulse

[Justa Werkenstiff]

Market: For Friday I said: " Averages did break down in final hour. But breakdown on SPX, my proxy, was marginal and the breakdown created oversold buys on the SPX (solid) and the DOW, OEX and WLSH. So downside there should be minimal and I have turned bullish from neutral short term on those averages.

We are close to the same status on the RUT, NAZ, NDX and SOX but they show more downside work could be done there.

Two scenarios: (1) We reverse and rally today based on the strength of the broader averages leading the way or (2) the averages that have bottomed work sideways/slight down on the weakness of the lagging averages so they can can catch up on the downside.

I can argue both scenarios for the day and both can take place during today but I slightly favor the second scenario at the close. There are many cross-currents going on here."


The second scenario did take hold and I suspect some end of year tax selling took place to make it so. Dell looks like a prime example.

As I said, there are many cross currents going on here which makes analysis and timing difficult. I remain short term bullish for now as stated above.

On the NDX and Naz side, I am less bullish because there is more evidnce in these averages that an intermediate high is in place. MSFT has an analyst's day meeting on January 5th. Given the dismal recent performance and oversold nature of this issue, it could bounce in reaction or in anticipation to this meeting giving the NDX some lift.