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Because of this, let's look for another week of choppy, volatile behavior as the bulls and bears battle it out on a short term trending basis, and keep with our current blueprint that the next chance of a tradable low in the markets will likely to come around the middle part of next month.
And quite a battle it was as the major market indices finally settled a turbulent week of trading by being up by an average of .55% from the previous Friday's close. Leading the way this past week were the Mid Caps with a gain of .90%, while the New York and NASDAQ Composite marketplaces showed little change with slight gains of .18% and .09% respectively. Looking over our breadth charts array and we see that the NYSE Composite, NYSE Common Only, NYSE REIT, CAC, DAX and FTSE advance/decline lines all moved net sideways for the week showing the underlying battle going on between the buyers and sellers at the current time. In this same effort by both sides, we also see that both the CAC and DAX advance/decline lines saw their declining trendlines continuing to control their intermediate term bearish patterns of money flow. On a more positive note, the NYSE Preferred advance/decline line closed again at new all time highs and showing where money continues to move into equities...those issues that not only have a preferred value over common stocks, but also provide a dividend as well (total return). Over in the interest rate sensitive issues, the yield on the 10 year note came close to reaching its downside target of around 2.10% (2.13%) on Wednesday before it bounced off support at its intermediate term rising bottoms line going back to its February lows of 1.67%. The NYSE Bond CEF advance/decline line itself moved begrudgingly higher as well in this inverse relationship, but with the High Yield advance/decline line continuing its pattern sequence of lower lows, there doesn't seem to be enough conviction as yet as to what the FED might do with short term rates next month. A lot of crosscurrents, to be sure, and why we continue to work with an indecisive market enviroment. The precious metals complex finally found some spring in their step with short covering becoming more widespread as the price of gold and silver continued to show no follow through to the downside for the second week in a row. Looking at the Precious Metals advance/decline line, however, and we see that much of the advance in PM equity stocks were weighted toward the components that make up the XAU advance/decline line and that we're still under the heavy influence of a negative trend. So, a good start maybe, but there's still a whole lot of work to do by the buyers before we'll see this asset class show enough stabilization to where an advancing price trend can finally commence. So with the BETS showing no change this week with a -55 reading, general market conditions remain weighted toward continued price decay. With our first downside target for the Dow Industrials of 17,100 being all but met on Wednesday's intraday sharp decline (17,126), we still have many outstanding downside price projections that still need to be met (or cancelled) before we can call the current pattern sequence complete. Because of this, and the ongoing action of money flow over the last 3 weeks, let's continue to look for choppy, volatile behavior overall until one side decides that "enough is enough of this going nowhere fast" and the market finally breaks out of its summer doldrums. Have a great trading week! US Equity Markets : US Interest Rates : US Real Estate : Precious Metals: Australia: England: France: Germany: India: __________________ Dave's LinkedIn Profile Technical Watch Twitter Page Technical Watch Facebook Page "As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan "An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan "What we see depends mainly on what we look for" - John Lubbock "The eye sees only what the mind is ready to comprehend" - Henri Bergson “Answers are easy; it’s asking the right questions which is hard” - Dr. Who - 1977 "You know the very powerful and the very stupid have one thing in common - they don't alter their views to fit the facts, they alter the facts to fit their views (which can be uncomfortable if you happen to be one of the facts that needs altering)" - Dr. Who - 1977