MomentumCycles

Momentum Cycles Update for the open of Wednesdsday, May 27, 1998:

Traders who followed last week's suggestions to exit the OEX call position on an intraday trendline break exited Thursday at a profit.Those who obeyed the suggested 1.50$ stop loss were either stopped out at a small loss Friday or Tuesday, depending on the actual entrance price.Days like Tuesday are why we prefer to use a close stop, in case weak cyclical{and previously predicted} days extend further in price than expected and /or break important price supports at round numbers, causing further stops to be run.Remember the last 3 OEX trades posted here were doubles or triples,so 1.50$ off a 15$ to 13.5$ option is a small proportional loss.The OEX model suggests a long entrance, confirmed by a CODI pivot, may be in the works for Thursday{late Wednesday?}.It may be wise to wait and watch Wednesday's action for possible further support level breaks before deciding on a trade entrance for Wednesday-Thursday.

Using a 12.5% trading band for the XAU ,and a 21 day moving average, the behavior this year has been to see short term rallies at a tag of the lower band.We are not there quite yet.The predicted break of 80 support took place today, in concert with CRB heading towards 210, then possibly 198, the 12 year low.

Trend:

End of months have crosscurrents due to asset reallocations and sector rotation. Modus operandi is to sell first and buy later. OEX regression channel appears to be breaking down. Projection oscillator is nearly oversold. NHNL is definitely showing toppiness and the jury is still out on whether a more prolonged downtrend is about to resume. NHNL will definitely trend below zero if the Bears dominate. ADHL is still on its last buy signal as one indicator has not fallen into sell mode yet. Remember, this is an intermediate to long term model and not a day trading model.

Breadth:

McOsc issue and volume breadth deteriorated further on Tuesday. Flow rate shows an increasing volume of shares per minute as the afternoon wore on. TICK made a -1300 level and backed off in a divergence with the equity indexes. CODI is now on the Buy Alert line.

Volatility:

Zone Timer is now in the Oversold Bullish zone, but we need an upturn first as it could trend down and sideways in a true bearish trend. However, previous excursions to these levels have been very brief as have the dips below zero in the NHNL plot. MVI chart is oversold and within in one day of issuing a buy signal. Could happen intraday on Wednesday.

Momentum Cycles Cones:

Cone 1 shows the Red cone tag and Cone 2 gives probable price targets for Wednesday.

Pivots:

OEX Classical and Statistical pivot charts are shifted downwards and give the intraday targets for Wednesday. S&P futures pivot is weak also.

Fibonacci Zones:

Weekly fib support was the target for Tuesday. That could mean that the rest of the week will be up towards the balance line(red dashes). That is wishful thinking. XAU is headed for Monthly fib support. The charts hit the weekly fib support zone.

DJI NDX OEX SPX TYX XAU

RSI, SMI:

SPX RSI channel is turning horizontal. It would not be too surprising to see the RSI move above the center band late this week and next week. XAU and TYX RSI and SMI are still weak.

Stocks of Interest:

ASTN still has buyers and sellers locked around 3 to 3 1/4, and was up today in a weak tech sector. CMR, unlike INCO{N.TO}, has so far held the double bottom.CMR was featured in a recent cobalt trade publication- an excerpt tommorrow.

OEX Trades:

The mechanical OEX models picked up a volatility band trade and recommends the OEWFF June 530 call with the OEX at current levels. The RSI and Momentum June 535 OEWFG calls are still in the models, but in reality if you are following our stop recommendations you would have been out last week. Any new positions would be at a lower strike to have a higher delta. Here is an OEWFF chart.

To quote from the Momentum Cycles Update for the open of Wednesdsday, May 27, 1998:

"Traders who followed last week's suggestions to exit the OEX call position on an intraday trendline break exited Thursday at a profit.Those who obeyed the suggested 1.50$ stop loss were either stopped out at a small loss Friday or Tuesday, depending on the actual entrance price.Days like Tuesday are why we prefer to use a close stop, in case weak cyclical{and previously predicted} days extend further in price than expected and /or break important price supports at round numbers, causing further stops to be run.Remember the last 3 OEX trades posted here were doubles or triples,so 1.50$ off a 15$ to 13.5$ option is a small proportional loss.The OEX model suggests a long entrance, confirmed by a CODI pivot, may be in the works for Thursday{late Wednesday?}.It may be wise to wait and watch Wednesday's action for possible further support level breaks before deciding on a trade entrance for Wednesday-Thursday.

Using a 12.5% trading band for the XAU ,and a 21 day moving average, the behavior this year has been to see short term rallies at a tag of the lower band.We are not there quite yet.The predicted break of 80 support took place today, in concert with CRB heading towards 210, then possibly 198, the 12 year low."

Momentum Cycles Update for the open of Thursday, May 28, 1998:

Late Wednesday it was !{see above}.Can't get closer than that yet, but we're trying.The low came at 2.30 pm., and traders watching for an end to the downtrend channel would have seen that occur at 2.45 p.m.Support at the lower 3.5% trading band {our previously expressed area to look for support} coincided with the targets on the pivot,fib and cone charts posted before Wednesday's open.CODI made a buy pivot right on schedule during the day after the scheduled money flow low point{posted over a week ago}, and during the time pension funds throw huge gobs of cash into equities {Wednesday is payday for college teachers ,and much of that is funneled into TIAA-CREF,for instance}.CODI pivots in the buy zone,with price tagging the lower 3.5% trading band and reversing, tend to be very reliable.Traders should therefore already be long OEX calls{see charts at bottom}with a stop 1.50 $ below the entrance price.Late comers can try to enter on intraday pullbacks Thursday using the pivot, fib and cone charts posted here daily.If there is a retest,an entrance might also be made on another violation of a downtrend line.Late comers should use a 1.50$ stop.

Can this market fall apart here, instead of rallying into positive monthly seasonal strength?Of course.The market is admittedly technically fragile.Further breakdown below Wednesday's lows, and its almost a guarantee.Our preposted low and high money flow days only measure probability, not certainty.This projected seasonal strength rally that may have started on schedule Wednesday at 2.30 may be fleeting, a dead cat bounce, or a pause in the storm.If so, using a preplanned tight stop, as we have tried to do, ensures only limited losses,and allows winners to run.

OF Special Interest:

Here is a possible scenario based on a series of price patterns called the Swing Machine. Thanks to Clyde Lee for this posting. See attached SwingMachine projections for potential runup!


Clyde Lee Chairman/CEO (Home of SwingMachine)
SYTECH Corporation
Email: clydelee@hic.net
7910 Westglen, Suite 105
Work: (713) 783-9540
Houston, TX 77063
Fax: (713) 783-1092

Trend:

OEX found support at the red regression channel dating from 7/96. Lowered earnings expectations should have an impact on the slope of the index. The NHNL, new highs new lows, is looking rather ominous. It has dropped to -5% as there were 199 new lows and only 18 new highs. This suggests that we have entered a real correction of substance, meaning that new highs in the index are not likely to have breadth confirmation and will fail and are to be shorted or hedged depending on your need. The ADHL remains on a tenuous Buy signal. Had the market not rallied back late in the day, this Buy signal would be under even more pressure as the ADRrs is based on relative strength of breadth and the DJIA index close.

Breadth:

Anyone watching the market today knows that NYA breadth was extremely negative. They also know that the last hour+ had what appears to be the beginning of the end of month rally we have been expecting to be positioned in OEX call options for. The Flow Rate chart shows the divergence that preceded the rally and ended in an unusually strong flow of over 8 million shares per minute at one point. CODI did make a buy pivot on the Buy Alert line. McOsc issue and volume were so negative going into the last hour that they still were headed down on a day to day basis. Further follow through from today should bring them to higher levels.

Volatility:

Zone Timer is oversold and trying to turn up. MVI is in a similar state and has not turned down across either its std dev band or the 70% band. It really does need to turn down for the index to rally.

Momentum Cycles Cones:

Cone 1 reflects a Strong day as the Red cone was tagged by the intraday low. Also note that the close was just above the regression channel, meaning that uptrend is still dominant. Cone 2 shows the price targets for Thursday, and the projection oscillator is pointing upwards.

Pivots:

OEX opens Thursday above its keyline and on its hourly trendline. This gives odds to higher prices.

Fibonacci Zones:

Monthly fib support was challenged intraday but the final close was back above the weekly fib support. Ratio oscillators are flirting with the 50% retracement level. Seasonality says the indexes should rally from here. TYX and XAU are still working the lower support levels.

DJI NDX OEX SPX TYX XAU

RSI, SMI:

These RSI plots are continuing to be an interesting set. XAU and TYX and SPX RSI are all on or near their oversold band. Also the SMI plots are having character after a long boring trend. XAU SMI is still down, SPX is coming off of overbought, TYX is near an oversold band.

Stocks of Interest:

ASTN rallied intraday to 3 and 3/32 after another retest of 3. CMR is still working what may be a double bottom in the 1.00 area.Cobalt News, the trade publication of the Cobalt Development Institute,recently had an article on Canmine entitled "Canmine,North America's only primary cobalt producer".{167 High Street,Guildford,Surrey,GU1 3AJ,U.K.}We expect a positive result within months on CMR's efforts to move to major producer status.Cobalt in high quality concentrate is still in great demand, with no new large sources of assured supply secure in North America except CMR.

OEX Trades:

There have been no changes as the OEX models are still recommending the June 530 and 535 calls. Yesterday's recommendation of the 530 for today was fortuitious providing you used the Momentum Cycles Support levels or Cones for suggested entry targets. Lower strikes could have been used for entry such as the 525 call, OEWFE. See OEWFE, OEWFF, OEWFG charts.

Momentum Cycles Update for the open of Friday, May 29, 1998:

Resistance at the round number of 9000,formerly support,was seen Thursday.To get this market going to the upside we need strong European index action,improved volume,and a good close above 9000, with NASDAQ stronger than the DJIA.Those who entered at the 2:30 to 2:45 downtrend break Wednesday have a little"wiggle room";late comers Thursday less so.In this environment, a 1.50$ stop makes sense, as we saw Friday to Tuesday,since many non MC reader traders without mechanical stops sold long positions in a panic at the lows Tuesday and worse, Wednesday ,at the lows near the lower 3.5% band.Parabolic,trendline,or set limit profit stops and stop losses can assure discipline in wildly swinging markets.As we can see from some of the overseas markets, our prediction of entire bull and bear moves within a single day is coming closer and closer to reality.In such an environment,trendline intraday stops become a more and more valuable tool.

We have discussed the Friday-Tuesday and Tuesday -Friday cycle before.In summary, when the NASDAQ has a very large point loss from Friday close to Tuesday close, there are very high odds for a rally from that Tuesday close to the following Friday close net.This goes against the normal tendency of traders to assume a weak Friday-Tuesday cycle will result in an absolute wipeout into the following Friday.Admittedly ,the Tuesday -Friday rally may be weak or only a dead cat bounce, or end Thursday or early Friday.Upside volume must pick up here for good legs to this bounce.

Trend:

NHNL is improving with a reading of -1% for Thursday. Perhaps this dip is going to be another buying opportunity after all. OEX regression channel is struggling against the blue channel line again and the lower side of the triangle. It was mentioned here last week that the first breakout of a triangle is often the fakeout. Lets see how this develops over the next week. Projection oscillators are pointing upward from an oversold level. ADHL is hanging onto its buy signal with only one of three components in sell mode now. It has had a reprieve for a week at least. DJIA percent bands give a longer term view and correction price targets talked about in the media.

Breadth:

McOsc issue and volume oscillators have turned up from a higher low. This is constructive. Now they need to move above zero to really get the index soaring. CODI has made a weak buy signal. NYA breadth is improving. Flow rate is much better than previous days as it is spending more time along with TICK above the zero line. We need that for a sustained advance in the index.

Volatility:

Zone Timer has made a "bullish" zone crossing from oversold back to neutral. Modified Volatility Index has also made a bullish pivot.

Momentum Cycles Cones:

Cone 1 shows an average range day. Cone 2 shows Friday range expectations. Cone 3 shows a 6 day outlook and where price might range assuming we get a rally and implied volatility drops to 20%. Here is an SPX cone.

Pivots:

OEX pivots look encouraging as the OEX is above the Keyline and the hourly trendline. The keyline has made a step upwards and the hourly has based after a bad spill in the previous week.

Fibonacci Zones:

Lower weekly fib support has held and the ratio oscillators are turning up from the oversold level and the center line retracement level. It looks like an end of - beginning of month rally has some potential from a technical picture.

DJI NDX OEX SPX TYX XAU

RSI, SMI:

All RSI bands are curving downward indicating a bearish environment and the respective indicators are near the oversold bands. This sets up for a short term counter trend rally. The SMI is longer term and reflects the overbought and weakening condition.

Stocks of Interest:

ASTNstill showing a mix of buyers and sellers about the 3$ level. CMRrebasing in the 1.00 to 1.30 area,now officially a member of the cobalt producers trade organization.

OEX Trades:

The mechanical model has exited the RSI trade at a loss and entered a TRIN trade on the 530 call, OEWFF. The model has an automatic exit after 7 days and doesn't give consideration to payroll seasonality. Personal stops would have protected profits or if held on then a 1.5 loss would have been taken. Here are the OEWFE and OEWFG charts.

Monday 7:45 a.m. update:

European and Asian markets and globex are hinting that Friday's decline may extend into New York Monday,as we had discussed on the weekend commentary.Traders should avoid new long positions until a clear downtrend violation on increasing breadth is achieved,using the channel chart discussed below.

To quote from the Momentum Cycles Update for the open of Friday, May 29, 1998:

"Resistance at the round number of 9000,formerly support,was seen Thursday.To get this market going to the upside we need strong European index action,improved volume,and a good close above 9000, with NASDAQ stronger than the DJIA.Those who entered at the 2:30 to 2:45 downtrend break Wednesday have a little"wiggle room";late comers Thursday less so.In this environment, a 1.50$ stop makes sense, as we saw Friday to Tuesday,since many non MC reader traders without mechanical stops sold long positions in a panic at the lows Tuesday and worse, Wednesday ,at the lows near the lower 3.5% band.Parabolic,trendline,or set limit profit stops and stop losses can assure discipline in wildly swinging markets.As we can see from some of the overseas markets, our prediction of entire bull and bear moves within a single day is coming closer and closer to reality.In such an environment,trendline intraday stops become a more and more valuable tool.

We have discussed the Friday-Tuesday and Tuesday -Friday cycle before.In summary, when the NASDAQ has a very large point loss from Friday close to Tuesday close, there are very high odds for a rally from that Tuesday close to the following Friday close net.This goes against the normal tendency of traders to assume a weak Friday-Tuesday cycle will result in an absolute wipeout into the following Friday.Admittedly ,the Tuesday -Friday rally may be weak or only a dead cat bounce, or end Thursday or early Friday.Upside volume must pick up here for good legs to this bounce."

Momentum Cycles Update for the open of Monday, June 1, 1998:

Various trendlines for intraday exits could have been used Friday to exit a long OEX call position at a profit from a Wednesday or even Thursday entrance.The plus 900 tick near 10:00 a.m. should have been a warning of incipient intraday price retracement in conjunction with the trendline violation of the upper blue line.The lower blue lines could have been used as a stop loss. Similarly, the red lines on Monday {extended through the day, or over days if neccessary}can be used to predict where an opening downtrend will end for closing out put positions or re entering call positions.We warned that the Tuesday -Friday retracement rally might end early Friday {see above}in this environment of nervous trading, and to use intraday trendline stops.The wisdom of that advice was seen Friday.

Remember, we projected May 26 as a low, followed by a rally on seasonal reinvestment monies.The next most probable turn points are June 3 as a high,June 24 as a low,July 2 as a high, followed by a falling market.Cycle dates are probabilities only, but long term readers know we have, over a long time, often nailed significant highs and lows to the day, often weeks in advance.We like to confirm these turns with other indicators.The OEX models shown below do not assume the availability of intraday exits, so actual trades may be slightly different than the model results shown.

There were several nonconfirmations of Friday's downside action,and the last several minutes of trading, where much of the damage was done, was reputedly caused by a Federal Reserve official's comments.

Trend:

For the time being it is looking like the modus operandi is to sell the rallies. The majority of corporations are reporting earnings estimates below that of Wall Street expectations. This has put a lid on index levels and created a trading range market as evidenced by some of the charts below. The OEX high for Friday tagged the 1995 channel line from below and then proceded to sell off. The projection oscillator is still over sold. DJIA chart gives the % corrections discussed on TV with regular occurrence. Note the DJIA stochastic momentum has turned down. The downgrade in high tech, particularly computer related stocks occurs in every May/June period due to the buying cycle of institutions and delayed buying because of the preference for new product releases in the fall. For next year computer and semiconductor puts might be considered,prior to the seasonally weak period.

Breadth:

NYA breadth improved in spite of the late day sell off in the blue chips. CODI moved further into the Buy Alert Zone. McOsc issue and volume oscillators continue to move up but are still below zero. Volume oscillator needs to move above zero before the Volume summation will turn up. Unless it does move above zero and above the issue oscillator, rallies in prices will not be sustained. The NHNL, new high new low, chart is gradually improving and the indicator closed above the zero line on Friday. Previously this dip below zero has been a buying opportunity. ADHL also improved on Friday with a strong breadth RSI vs DJI RSI, and NH strength increased and NL strength decreased. This is the kind of underlying action that is needed if prices are to resume advancing, even if for only a week.

Volatility:

Zone Timer has moved back into the oversold zone providing a better entry for seasonal call buyers. MVI moved back towards the Buy band.

Momentum Cycles Cones:

Cone chart shows the probable price ranges for the next five trading days based on Friday's implied volatility. Green is average, red is strong, magenta is crash up/down.

Pivots:

OEX pivot chart shows that we should expect a wider range of support and resistance on Monday. It also suggests a weak opening as the OEX is below the keyline, below the hourly trendline, and the keyline is shifted down a bit from Friday.

Fibonacci Zones:

Next week has the potential to be one of the wildest weeks we have seen in some time. Note how far apart the weekly support and resistance lines are.

DJI NDX OEX SPX TYX XAU

RSI, SMI:

All three RSI channels are sloping downward. All three SMI momentum lines are sloping downward. XAU and TYX stochastic momentum are near support/reversal lines, SPX has just crossed below the overbought line after a sustained period.

Stocks of Interest:

ASTN and CMR both working a set trading range.CMR between 1.00 and 1.30, in what may well be a double accumulation bottom.ASTN cycling about 3$, with longer term buyers trying to acquire shares from impatient traders disappointed with lack of news.

OEX Trades:

The Momentum model lost its position. RSI is going to try again with the 525 calls. The second chart shows the running hypothetical summary from 1/2/98 to 5/29/98 trading one contract,using the perfected models,end of day results only. This week has seen the first draw downs all year of these particular models due to the choppy and intraday reversals that make end of day trading exceedingly difficult, especially recently,and which was predicted for a whippy, crosscurrent prone May cycle.

Monday 7:45 a.m. update:

European and Asian markets and globex are hinting that Friday's decline may extend into New York Monday,as we had discussed on the weekend commentary.Traders should avoid new long positions until a clear downtrend violation on increasing breadth is achieved,using the channel chart discussed below.

To quote from the Momentum Cycles Update for the open of Monday, June 1, 1998:

"Similarly, the red lines on Monday {extended through the day, or over days if neccessary}can be used to predict where an opening downtrend will end for closing out put positions or re entering call positions.We warned that the Tuesday -Friday retracement rally might end early Friday {see above}in this environment of nervous trading, and to use intraday trendline stops.The wisdom of that advice was seen Friday.

Remember, we projected May 26 as a low, followed by a rally on seasonal reinvestment monies.The next most probable turn points are June 3 as a high,June 24 as a low,July 2 as a high, followed by a falling market.Cycle dates are probabilities only, but long term readers know we have, over a long time, often nailed significant highs and lows to the day, often weeks in advance.We like to confirm these turns with other indicators.The OEX models shown below do not assume the availability of intraday exits, so actual trades may be slightly different than the model results shown.

There were several nonconfirmations of Friday's downside action,and the last several minutes of trading, where much of the damage was done, was reputedly caused by a Federal Reserve official's comments."

Momentum Cycles Update for the open of Tuesday, June 2, 1998:

The continuation of Friday's downchannel was seen Monday,with sellers shorting the top red line, and covering near the bottom,especially towards the close of the day by short daytraders.A schizophrenic day, especially for a normally strong first trading day of the month.Vehicles that appeared to offer safe {or relatively safer}havens for cash fleeing perceived riskier areas benefitted.Thus bonds up.41%,utes up2.25%,DJIA up .25%,and,in contrast,NDX down 2.2%,XAU down 5%,NASDAQ down 1.8%,transports down 2.25%.Using these areas to measure fear or lack of fear, a rally with NASDAQ stronger than DJIA on increasing volume{low volume is bearish here},on a DECLINING bond market is likely needed to get something going for the general market to the upside.CODI well in the region such a rally should happen.The negative 1059 tick is constructive for setting up more oversold conditions.Traders choosing to go long the OEX on a downchannel breakout should be prepared to daytrade as the rally,if and when it comes, will likely be fast, furious, and prone to reverse,so use those intraday channels well.This environment is difficult for end of day traders- you can get whipsawed to death.

XAU is now at late February support levels,and the next lower price level is the 63 area at the recent yearly lows.Note that,while extremely oversold, no ratio oscillator or momentum crossover has yet taken place.

Trend:

Monday's support was found at the July 1996 regression channel line. Projection oscillator is making higher lows. NHNL slipped back below zero with an increase in new lows. ADHL remains on a buy signal. The DJIA chart shows the %band relationships back to fall of 1997.

Breadth:

McOsc issue and volume oscillators turned sideways on Monday aborting the morning rally once again. One of these days we should expect a low in the morning and a higher close followed by a succession of higher closes. CODI is making another weak buy pivot in the Buy Alert Zone. NYA breadth was decidedly negative today. The Snapshot chart does show an improving TICK, Prem, lower yields, higher price, declining TRIN. Only thing missing is the volatility component and that was higher on the day. Right about 12:30 the flow rate and TICK turned negative taking the OEX trend downward until one hour before the close. One of these days when the pros decide the selling pressure has subsided and their forced absoption of stock subsides, we should see the flow rate and tick remain above zero for more of the day and especially in the afternoon. Price will then seek higher levels. No one knows when or if this will happen anytime soon, we just have to be anticipating it.

Volatility:

Zone Timer is reaching for the oversold lower risk long entry level. MVI is closer to the buy band than the sell band.

Momentum Cycles Cone:

The odds cones and projection oscillator have the appearance of a bottom being formed. A strong up day would take us to 538 to 540 level on the OEX.

Pivots:

OEX keyline is shifted down for Tuesday, but the open is right on the keyline giving 50/50 odds for direction. The open is below the hourly representing weakness.

Fibonacci Zones:

The equity indexes have been working below and on the weekly stop loss line, the white stair step dashed line. Ratio oscilltors are at a reversal level. They can drop further to oversold at 25%, but the possibility of an upward reversal has to be given some credibility. XAU is now working the June monthly fib support zone with its ratio oscillator now in the extremely oversold region. T Bond yields found support Monday in the lower weekly fib zone.

DJI NDX OEX SPX TYX XAU

RSI, SMI:

Channels are all pointing downward. Indicators are all pointing downward. The SPX RSI and SMI are painting a bearish picture longer term and rally potential short term from the oversold RSI level and with support from the yields.

Stocks of Interest:

ASTN now has resistance at 3 and support at 2 and 3/4.They are working on so many fronts that it would be logical to expect some positive news any day now.CMR inching up from the double bottom ,now at 1.18.News here will likely come soon also.They are working on some way to go commercial with that huge cobalt deposit.

OEX Trades:

No new mechanical trades were triggered on Monday.

Momentum Cycles Update for the open of Wednesday, June 3, 1998:

Normal June money flow cycles would have June 3 as a high point and June 24 as a low point.June 4th is a Thursday, which tends to have a downside bias, and weak Thursdays recently have been followed by poor Friday closes.

Nothing about the last week or so has been normal,however ,in terms of index movement.As discussed yesterday,weak bonds presently show a lessening of fear,as well as NASDAQ stronger than DJIA.That was Tuesday's action, in violent contrast to Monday's.Strong bonds,rallying defensives like Wrigley and the utes presently reveal increasing fear.A lot of motion and fury,a daytraders environment.In this climate,especially on relatively light volume, positions can be whipsawed during the day numerous times, so trading channels are the way to go.Money flow probability cycles presently conflict with the OEX mechanical trade models shown at the bottom of this page,and some of the other technical indicators,such as the CODI position.

Confusion of traders is being seen by large uptick and downtick readings within the same day on volume readings that are setting up for a big move this month.

Some readers asked us to repost the intraweek cyclical probabilities page, so here it is.These probabilities should be used in conjunction with other indicators.

Trend:

New high, new low trend is still bearish on the NHNL chart. Even though the projection oscillator is oversold on the OEX regression channel, the OEX will have trouble making much of an advance without broader based support. Here is a DJI chart.
Here is the weekly rainbow momentum chart. The downward weekly momentum is keeping a lid on the usual positive daily seasonality. Trying to trade countertrend(i.e., up)with weekly momentum down will only work intraday or at the end of the downward weekly trend.

Breadth:

McOsc issue and volume oscillators are not blasting above the zero line, and instead are lingering below zero in bearish mode as this correction drives traders crazy. Buy in the morning, sell in the afternoon. Or buy on the close and sell the following morning. Just when the rhythm becomes fashionable the cycle will invert and trap more than a few. CODI made a more impressive buy pivot on Tuesday. ADHL retains its buy mode as price works sideways and time for breadth to improve is running out. Flow rate was pretty evenly balanced until late in the day when selling dominated with some heavy negative flow and ticks. Just for the record, TICK is referenced to the net number of shares up and down on their last, trade whereas Flow Rate is a volume per unit of time measurement.

Volatility:

Zone Timer and MVI made buy pivots on Tuesday.

Momentum Cycles Cones:

Cone 1 shows today's range, note support on the keyline. Cone 2 shows Wednesdays probable price ranges for average (green), strong (red), and crash up or down (magenta) types of days.

Pivots:

OEX Keyline for Wednesday is stepped upward from Tuesday. It is fairly close to the hourly trendline and could easily work above it on Wednesday. OEX starts the day again right on the keyline. Odds are slightly better than 50/50 for an up opening. The OEX found support on the keyline both in the morning and afternoon.

Fibonacci Zones:

Equity indexes are working below the weekly stop loss lines as should be expected in a serious correction. Projection oscillators are oversold. TYX is going to challenge the weekly balance (red line) and the daily stop loss line (green stair step) in the next few days. XAU has risen off of monthly fib support and is now back into the weekly fib support. A close above the weekly balance(red dashes) on the DJIA and SPX might be met with an explosive advance.

DJI NDX OEX SPX TYX XAU

RSI, SMI:

XAU, TYX, and SPX RSI are rising off the buy bands. Longer term SMI, momentumwise, the XAU and TYX are oversold(T Bonds overbought) and the SPX is still coming off of overbought.

Stocks of Interest:

ASTN finally showed some price weakness that may be associated with recent weakness in techs, or due to a possible issuing of more shares to fund expanded operations or possible acquisitions.Just a guess on our part, but ASTN's president succeeded in a similar manner with INSTANET. CMR retested 1.05 on larger volume,still holding the double bottom.Close was well off the recent lows.

OEX Trades:

No changes from yesterday.