Registered: 1101777014 Posts: 5,158
Reply with quote
Because of this, let's now extend the timeline out to around the first week of October as our next likely bottoming event, while in the meantime, we'll continue to see a highly volatile and choppy pattern sequence for next week as the market attempts to find its sea legs and begins to, once again, construct a newer and more firmer market foundation from which an advancing price sequence can actually begin.
Did someone say "highly volatile"? Wow! The equity markets had a historic week of trading as the average price range from top to bottom came in at an amazing 7.08%, but when all was said and done, the major market indices were actually up an average .83% from last Friday's close, with the NASDAQ Composite having both the largest weekly range of 11.25% and the highest weekly gain of 2.60%. Through Friday, the average monthly change for August is now down 5.58%, with the declines trending evenly between 5%-6% among all the major U.S. indices. Looking at this past week's breadth charts array and we see that nothing was spared in this global mini crash as all of the price averages saw sharp daily declines early in the week, then reversed just as sharply to the upside mid week from deeply "oversold" levels, and finished at or very near their starting points from last Friday's close. Breadth of market also moved in sync with this worldwide retch as if to relive itself of its financial ills once for all. Holding steady in this period of malaise continues to come from the NYSE Preferred and NYSE Bond CEF advance/decline lines that remain in a constructive pattern sequence of higher highs and higher lows as if to provide an antibiotic to the sickened patient. Any further strength that we may see over the next several weeks in these two money flow indicators would then suggest that the worse would be behind us, and that the market was in the process of recovering of its current sickness. Another positive with this weeks sell off comes with the CAC advance/decline line which continues to provide "trend divergence" between its money flow line and the price index itself. Given France's importance in providing an economic bridge between England and Germany, this is a good sign that things may not be nearly as dire as one would think on the European continent at this time. Of course, this can change quickly if and when the markets begin their technical dance of developing the internal foundation we're looking for to occur during the month of September, so let's keep a watchful eye on this divergence between the bourses during this time of reconstruction and see if it holds - OR - the CAC joins the DAX and FTSE in a synchronized wash out. Over in the precious metals, both the Precious Metals and XAU advance/decline lines pulled back sharply during the early week capitulation though the XAU A/D line did remain above its all time lows that were seen earlier in the month. The broader based PM stocks were not so lucky though, and this lack of agreement between the two money flow lines will delay our next buying opportunity to early October. Interestingly enough, this is the same time in which we're now looking for a tradable low in equities overall, so we seem to be nesting toward something cyclically during the month of September to make this happen. Stay tuned. So...the market continues to gyrate wildly as if it's gasping for air and in need of a monetary fix to keep it from going into shock. With the BETS indicator actually showing slight improvement this week with a reading of -55, any further internal strength from this time forward would highly suggest that the market is showing some stabilization as if the medication given, in the form of cheaper money, is beginning to have its desired affect. But as we know all too well, these things can remain quite fluid as to when and where one could say that things are back to "normal". Because of this, we should continue expect continued high volatility for at least another week or so, and it wouldn't be too surprising if this recovery period extends into quarterly expiration which is due on September 18th. As a reminder, don't forget that the U.S. markets will be closed for 3 days next weekend for the Labor Day holiday which falls on Monday, September 7th, and that the 10th day of our current Zweig Breadth Signal trigger (currently at 52% after 4 days on the EMA) would also come when the market reopens on Tuesday, September 8th. 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