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In any event, this remains a scalpers (day traders) market, with prices and volatility likely to remain quite erratic for another several weeks.
With quarterly OPEX and the FED policy statement now finally behind us, it turned out to be just another week of high volatility for day traders and scalpers alike as the major market indices settled down by an average of .07% from last Friday's closing prices and extending the market's streak of alternating average closes to eleven straight weeks. Looking at our breadth charts array for this week shows that there were significant amounts of money that moved back into U.S. equities from Tuesday up until the FED's surprise announcement of showing no change in their monetary policy stance late Thursday afternoon, with the price gains that were made by this rapid decisive action all but vanishing on Friday. Chart wise, we'll call Friday's downdraft part of an obligatory technical snapback to the upside breakouts of the various symmetrical and right angle triangles of the last several weeks, with this analytical idea finding internal support as the rising bottoms lines of the NYSE, NASDAQ and Wilshire 5000 breadth McClellan Oscillator's remained intact with Friday's pullback. We also saw a sharp advance in the BETS indicator this past week as it moved from a "Sell" (-65) to a " Hold Shorts with Protective Bullish Stops (above market)" (-40) reading adding to the idea that the balance of control may be shifting from negative to positive. With that said, however, the volume McClellan Oscillator's did not show the same kind of buoyancy as their breadth counterparts did, and because of this, the mid week upside breakout in prices may had been one of those classic bear market rally's where further downside probing will still be needed before we find an actual tradable bottom...with the beginning of October still remaining on the radar for this event.Adding to the idea that we still may have some unfinished business to the downside is the negative behavior we're seeing in the Australian and European advance/decline lines which showed divergent weakness during last week's rally seen here in the United States. Taking this, and the inability of the High Yield advance/decline line to break above its 3 month series of declining tops (even with the FED's no change in policy statement), does not bode well for the bulls over the near term, and a complete reset between breadth and price would not be surprising as a result. The precious metals asset class took the FED's policy statement in positive stride as the price of gold (+2.82%) and silver (+3.87%) were up nicely for the week, while the Precious Metals advance/decline line was able to move sharply to the upside mid week after making new all time cumulative lows on Tuesday. With our projected forecast of a tradable bottom coming in or around the beginning of October as well, it will be important to see good upside follow through (with respect to money flow) in the precious metals stocks this coming week to break the back of their long standing declining tops lines seen on the charts. A success in doing so would go a long way to help in preparing for this time objective. So...what started out to be a promising week for the bulls turned into abrupt disappointment as what was easily given was taken away just as quickly. With many of the trending oscillators that we use to measure the amplitude of money flow showing a mixed picture on Friday, it's likely that we still have some additional backing and filling still yet to be done before we can call the corrective process from the mid August highs to the crash lows complete. With the rhythm of the markets still highly volatile in this ongoing process, let's continue to look for this high degree of fluctuation to continue into next week as the intermediate term battle between buyers and sellers begins to take a more important role towards, what is hope to be, a tradable low that can last for a period of weeks instead of days at a time. 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