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fib_1618

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US Equity Markets
:

Although the bulls last week tried their best to move above trendline resistance and back into their rising channel, it was just too much to overcome, and a rally failure was the result. Short term downside breadth momentum also canceled out the upside price objective of 1150 in the process. At this juncture, the NYSE composite A/D line is holding up fairly well, but the bulls will need to step up early next week and make their point known or an opportunity to stabilize the intermediate term downtrend will be lost.



The NYSE common only A/D line showed the most amount of weakness this past week and is now within a whisper of challenging its early June lows. A break below these same lows would open the door for follow through price damage below the "probable support line" for the Dow, as well as, the rest of the NYSE group of stocks.
 



After moving to new all time highs last week, the NYSE preferred only A/D line took a pause, and is once again resting on its longer term rising bottoms line. Any break below this trendline would not be good news for a marketplace that's already been bruised and battered.



US Interest Rates:

With the NYSE Bond CEF A/D line continuing to move to new all time highs, this has pushed the 10 year yield to (Fibonacci) 13 month lows. The near term question now becomes whether this recent move below the lower boundary of the horizontal channel is an exhaustive move or, given the direction of the Bond A/D line, the beginning of a "flight to quality" blow off of some kind. Stay tuned.



US Real Estate:

The NYSE REIT A/D Line continued to move in sync with price this past week, but we might be close to completing a simple snapback to the short term declining tops line that previously controlled the pattern from the April top. Stay tuned.



Precious Metals:

With the price of gold continuing to find support on its rising bottoms line (in orange) this past week, the Precious Metals A/D line continued to show a lack of monetary leadership that would help maintain such a structure. Meanwhile, price is now leading breadth to the upside with the XAU data which might suggest buyer capitulation. Unless these configurations change fairly soon, the price of gold might be in for a nasty shake out near term, and with it, taking precious metals stocks along for the ride.






Australia:

Having just enough interest to push the XAO index above our price objective, the price pattern found strong upside resistance at the intermediate term declining tops line. Given the continued weakness with the XAO A/D line, and the bearish divergences noted in the PM stocks above, this is a market that's just asking for trouble.



England:

The FTSE cumulative A/D line found it difficult to stay within the rising channel, and is now back below the rising bottoms line that previously controlled the pattern. The good news so far is that price is leading breadth, but if current global nervousness continues early next week, we might be looking at a intermediate term technical breakdown, and with it, a possible trip all the way back to the July 2009 price lows.



Germany:

The DAX cumulative A/D line continues to be the bright beacon this week, but given the general mood of the other A/D charts, you have to wonder if it's leading or lagging. It should be a very interesting week coming up.




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