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Reply with quote  #1 
With Monday being the 28th anniversary of the stock market crash of 1987, next week promises to be another volatile week of trading, with more of a bullish bias than we've seen since the early spring of this year, and a full on challenge of the 200 day EMA's on many of the price charts the major focus.

Increasing its winning streak to 4 in a row, the major market indices closed up again this past week by an average of 1.57%...this time being led by the large cap issues of both both exchanges. The NASDAQ 100, in particular, had its best week of trading since the end week of July 17th with a 4.18% gain as it finished on Friday at price levels not seen since that time.

Looking over our breadth charts array for this week shows that the majority had positive showings with the interest rate sensitive group of issues leading the way to the upside. This included the NYSE Bond CEF advance/decline line matching its all time cumulative highs seen on April 21st, and the NYSE Preferred advance/decline line continuing its streak of seeing new all time highs as well. The High Yield advance/decline line also saw good upside progress as more and more traders decided that with global central banks suggesting slowing economic growth by flooding their markets with cheaper money, this will keep the Federal Reserve Bank from raising rates here in the United States for the unforeseen future. This revised outlook, in turn, helped to spark all of the global equity markets cumulative money flow lines, both domestically and internationally, as they have now broken above their declining tops lines that have been controlling their patterns since the early spring period of this year.

The Precious Metals and XAU advance/decline lines continued to meander in their sideways path of capital inflows in spite of the fact of cheaper global monetary policies and its availability to the markets. This would then suggest that many of the asset classes are indeed in need of capital to keep them buoyant, and monetary excesses, of which are critical to gains in the precious metals, are not yet ready to make their appearance. Because of this, a continued defensive stance towards this asset class remains suggested.

So although the week was a positive one for the markets in general, the BETS remains in neutral territory with many of the cumulative charts that make up this indicator still looking for better amplitude in their structures. However, with liquidity flows now looking more and more positive with this week's trading on a global basis, the path of least resistance remains with the buyers as it has for the month of October. Looking toward to next week then, the interplay of index prices with their 200 day EMA's will still remain our primarily focus...with obligatory snapbacks for those indices that broke above this time period resistance level this past week (INDU, SPX, COMPQ), and the potential for breakouts above this same EMA line for those indices that still haven't done so (NYA, MID and SML). What happens in this relationship will likely set the tone of what we should expect for the month of November...with better volume plurality also being an important sticking point in helping prices to attain even higher levels.

Have a great trading week!

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