MARKET POINTS: by Woody Dorsey
As advised last week on my nominal low date, “one may want to simply get Neutral. Corrective ranges often resolve with upside episodes.” Last week was a great cover. The Nominal timing remains Bullish. There is no big picture. Do not “Believe” in the market. Black Holes (BH) are far away. Focus now on potential Golden Halo (GH) to sell into. More Good news and upward churn would fit with that scenario.
- Near Term Diagnosis: Sentiment came in at 39% Bullish today which seems normal after what has happened.
- Interim Term Diagnosis: The expected “Buy the Dip” Uptrade is still operative. We have to wait for a signal of an interim top.
- Long Term Diagnosis: The TrumpTopping Process will eventually result in a “very meaningful decline.” That is not due yet.
- QUESTIONS ANYONE? Client question.-So when it says ” there’s potential downside into 4/19 “Does that mean to expect. A turn up in the market at that point? I remember reading that but wasn’t sure how to interpret that. Greg”
- Thanks Greg. I am not sure what report date your quote above is from? But my work has said to expect weakness into last week. Thus, the interpretation is to cover shorts and expect a “turn up in the market” as you say.
- You had mentioned the possibility of two relatively major declines during 2017. My question is whether the March/April decline would be considered to be one of the two, or is there still the possibility of two major declines remaining during 2017? Very much appreciate everything you do and thank you for entertaining our questions. Hope you have a very good day. Ben.”
- Thanks Ben. Good and interesting question. I preface this by saying that I study the market very carefully and recognize after 40 years that it is wise to try to develop a subtle market mind. That means one may have to question and modify ones assumptions. In regard to your question, the recent decline may not seem important but it did last for a significant interim term. But the bigger corrective potential was to come after that low and this current rally. I can now say that what I am looking at may be a, “DoubleDown” (DD!) That is two corrections in one or, one great correction with 2 interior legs within it. That is very exciting and if it occurs would be dramatic and infer big moves in other markets as well. Recent upside fits this potential well but we must be patient. I take it one trend at a time. Let’s give this market a bit more time. This fits with my comments from weeks ago, “That a great correction will be coming. It is not here yet. If one really wants to learn more about the market…just listen to it and follow it. No one can teach you to become self-taught! One has to do it for oneself”
Please email any questions as they are likely to be of interest to all readers and may inspire me to provide more and better answers to the mysteries of the market than I might offer just on my own. [email protected]
MARKET TIMING: The 99% Bullish extreme on 3/1 was cogent and resulted in a multi week correction. It is not as much the degree of high Sentiment there. It was that it occurred at the end of a long run up and near a Dorsey timing high. That offered a different interpretation than the recent back to back, 93% and 94% Daily Sentiments which signify a new excitement or surprise and are thus, Recognition signatures. As I allowed earlier the 3/1 became best interpreted as a 3 wave top or, a momentum high. The expected “Correction into 4/19ish followed another upside episode into May” was a, “Buy the Dip” situation. The Price Recovery into May continues. Last week was profiled as a potential low. There are some known dates coming up: 5/3 French Debate, 5/7, French Vote. France turned out to be Bullish so, if we rally into the 5/7 results, it may perversely, be a sell! There remains an indicant for a trading High 5/10-15. That could be followed by a good decline Dates are for members only-join now followed by further upside tries even into Dates are for members only-join now. Again this TRUMP 2.0 is the endgame I have been looking for.
SENTIMENT INTERPRETATION: The Dorsey Tactical Market Sentiment registered a rare 99% Bullish on 3/2 which identified a momentum High. The 8% Bullish did fall close to the Lows. I noted “the 90% on 4/21 as likely confirming the low and resolving into the May upside.” The back to back Daily sentiment readings of 93% and 94% do caution traders of near term froth.
The DORSEY Intermediate Market Sentiment declined to levels commensurate with prior trading lows. And, was deemed to be, “an ideal accompaniment to the profiled recovery into May. All measures of sentiment are supportive of a Recovery.
MARKET SUMMARY: A modest albeit persistent correction from the 3/1 Top lasted 6-7 weeks into a profiled timing low last week. That has clearly been ratified. Repeat: “Allow for this Recovery into May.” I am watching and studying for the next interim high or, Golden Halo (GH) to sell into. Why not just let stocks chase their own tail until then.
TECHNICAL VIEW by Gary Dean: The bulls need to push the spx above 2398 resistance for a reaction trade up to 2402/2406. The bears need to push the spx below 2377 for a reaction trade down to 2368-2364
- Short Term Support- Below 2377 is earliest clue 2368/2364 may come into play
- Resistance Levels: 2398-2402-2460
The SPX is either building a large range here-or we are in the final wave 5 up. The difference, if a wave 5 up, we would expect some chopping around, by higher highs would be expected. Targets are hard to say when we are in the beginning stages (if a wave 5) and once some bearish divergences and diagonal patterns start to form, then we can look for upside targets.
The next pattern is just a range-and if that is the case-then 2400 should be the ceiling-and we would watch the 2377 as the bottom of the range. If that doesn’t hold, then I would look at 2366-2361 as a possible lower range. Again, it is hard to say where-being we haven’t even started down yet. Let things play out-don’t force a direction or trade. For now-the important resistance is 2400 and support is 2377.
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