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fib_1618

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So...with the market giving us nothing really new to work with, the ISEE data showing a preponderance for option traders to continue to believe that each pull back is that of an important price top, and the BETS indicator remaining in "Buy" mode, we'll continue to go with the path of least resistance next week which remains up until proven otherwise.

It turned out to be a rather nervous week in the markets with the major market indices breaking their 5 week winning streak by closing down by an average of 1.02% over the previous Friday's closing levels with the value based New York Composite Index leading the way with a 1.46% decline while the growth based NASDAQ Composite Index providing the greatest amount of buoyancy with a decline of only .33%.

Looking at the breadth charts array and we see that the majority of the damage took place in the interest rate sensitive issues with the NYSE Preferred and NYSE REIT advance/decline lines actually breaking below their rising bottoms lines from last December while the NYSE Bond CEF advance/decline line provided a perceptive break of this same advancing trendline. On the other hand, the most liquidity sensitive money flow line, the NYSE Specialty advance/decline line, did not break below this same line of positive influence suggesting that most of the sell off was more emotionally based than it was substantive. Looking further at the charts and we can see this emotionalism in both the NYSE Bond CEF and NYSE REIT data as interest rates on the 10 year note broke above its declining tops line while prices broke down in the Real Estate iShares without the benefit of money flow leading these same violations. As breadth must lead price, both of these sectors have then moved too far, too fast for these breakouts to be maintained, so we'll likely see a reversal in both interest rates and REIT issues in the upcoming week as these technical forces show their dynamic influence.

The Precious Metals and XAU advance/decline lines continued lower this week and this accelerated the downside path in the price of gold after it broke below its intermediate term symmetrical triangle the week before...winding up on Friday at its lowest levels since the double bottom lows of December of 2013. On a longer term basis, the price of gold has now perceptively broke below its (Fibonacci) 8 year rising bottoms line going back to 2005. With the intermediate term expectation of the precious metal's money flow lines continuing to traverse to the lower end of their structural range, and minus any short term attempt to see technical snapbacks both internally and externally, we'll continue to look for lower prices in the metals over the next several weeks in what should be a longer term crucial price test for the yellow metal in the $1150/$1160 area. 

So with the markets in a state of flux and waiting for some trading clarity, along with the BETS now maintaining a fully defensive posture for the longs, and quarterly quadruple witching coming next Friday, let's look for a choppy, sideways marketplace next week as both sides continue to battle it out for short term control overall.

Have a great trading week!

US Equity Markets:

[breadthspx091214]



[breadthdjia091214]


[breadthspec091214]


[breadthpre091214]

US Interest Rates:

[breadthtnx091214]

US Real Estate:

[breadthreit091214]

Precious Metals:

[breadthpm091214]


[breadthxau091214]

Australia:

[breadthaus091214]

England:

[breadthftse091214]

Germany:

[breadthdax091214]

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