The Emini closed down 2.00 points at 1,420.50 on Tuesday. The market has bottomed, as anticipated last Friday, and so far support at 1,415 is holding. However, we’re yet to see a significant breakout to the upside. Update on the Smart Money indicator today. Check out the chart below.
Smart Money indicator
The Smart Money indicator (my version called "Secret 3") is shown on the chart above. We’ve reached a heavily oversold value of -112 on Tuesday. The last time we saw such an oversold reading was mid July 2006, at the beginning of the last uptrend. This indicator usually starts to move early with trend changes, but because there was some profit taking at the end of yesterday’s trading the indicator has not turned up yet. Disappointing.
In addition, Emini cyclical indicators on the 81 minute (5 bars per day) and 135 minute (3 bars per day) time frames are about to turn down and so we might have to wait for a break to the upside. The overnight market is also showing weakness. However, my overall analysis still points to a trend change and a final upward Elliott wave 5 move.
The NASDAQ is showing strength and it will be interesting to see if Apple will lead the broader tech group higher. Today saw record volume on AAPL and a close within cents of its record high – all driven by their announcement of the iPhone.
If AAPL closes down tomorrow then today was a selling climax and that volume was profit taking. But if the advance continues, new highs will follow and other tech stocks could follow. If you haven’t seen Steve Jobs’ iPhone presentation then check it out on www.Apple.com. As a die-hard Treo user I’m itching to see if the touchscreen keyboard is as good as he made it look.