As I said the other day, DJIA gave an RSI sell signal. NDX had given one a few days before.
There's also an RSI buy signal, which says to buy when it dips enough.
So far, DJIA is still on a sell, because it hasn't dropped enough. NDX is out of its sell signal, but not in the buy signal area. However, SOX is in a buy signal area.
Its a mixed bag. We got SOX really weak, broke trendline, etc. But the DJIA is quite strong, but in extremly overbought territory.
So tomorrow is a critical day. If the techs continue to sell off, especially the semis, then I think an IT top has been made. A lack of ability to rally on an RSI buy signal was proof of IT top back in may. Ofcourse, this has to apply for DJIA as well, but its far into RSI sell territory, not RSI buy territory.
To have decent proof that we've gone past the IT top, I would like to see DJIA go down from its RSI sell territory, and into RSI buy territory, but fail to bounce with the buy signal. I think if the Dow can't bounce from an RSI buy signal, the IT top is definately in.
Gann used to say that in a bull trend, you hardly get more than 2 down days in a row. If you get three down days in a row, its a sign of a potential trend change. I wouldn't call the last 2 days in the DJIA 2 down days necessarily.
Status of RSI sell systems, and RSI buy systems
Started by
dcengr
, Jan 18 2007 05:16 PM
1 reply to this topic
#1
Posted 18 January 2007 - 05:16 PM
Qui custodiet ipsos custodes?
#2
Posted 18 January 2007 - 05:32 PM
I agree. Another down day tomorrow should change the TREND to down. I was thinking today would do the trick, but no. We need another down day to close at least 20 points lower on NASDAQ to have a trend change. We'll have to wait and see what happens. However, the number of bulls on AAII this week is 58. The highest number since Jan 06. This does tip into the favor of the Bears....
Barry