[newsletterchapter2 title=”GENERAL MARKET COMMENTS”] Global Equity Markets have continued to exhibit generic strength as we allowed. This behavior was not unexpected. Again, “rolling, diverging strength could continue for more of the Summer.”
But, Summer is passing before our eyes and if there is a Down sequences here for 1-2 weeks, it only allows a few weeks of potential upside which is due to be followed by, Fall. If this Liquidity Complacency Gestalt can persist into August, an important, perhaps dramatic Vulnerability profile may manifest.
Repeat: “This is a tricky market. It is a Manipulated Market. Don’t Believe in any of it.” It has been good to wait and see the upside from the sidelines. We are now in a Correction but it may end up being penultimate to an even sweeter Sell spot.
[/newsletterchapter2][newsletterchapter2 title=”MARKET TIMING FACTORS”] We noted that the profile allowed for strength into the end of Q2 and the July 4th Holiday week. We got that. Then, “There is an unusual timing pattern due 7/14-16. The presumption was that stocks would break down from some sort of Holiday High.” That is occurring and it could be a scary decline.
However, it may just set up an episode of final diverging strength into August B4 a larger scale Correction could occur. Lets see how much bearish behavior we get into 7/14.
[/newsletterchapter2][newsletterchapter2 title=”MARKET STORIES”]Financial Culture was very “Happy, Happy, Happy.” It was and is, incredibly Booring. That Complacency preceded this Reality.
[/newsletterchapter2] [newsletterchapter2 title=”RELATED MARKETS”] Gold has been subject to minor Congestion and corrections within its new uptrend. Treasuries remains in their strange Range. They had a chance to break open on the strong Jobs data but could not do it. Janet Yellen can keep cooing her cloud nine canned rhetoric. The Fed is Coo-Coo.
[/newsletterchapter2][newsletterchapter2 title=”SENTIMENT INTERPRETATION”] My interpretation of Sentiment Behavior has been “Generically Bullish.” The 94% Bullish (5/13) was the Breakout signal. High sentiment can be Bullish! The cluster of High sentiment near 6/19 was signaled a momentum high.
The 97% on 7/7 resulted in a sharp break. This signifies this Correction could persist into at least 7/14-16ish. Intermediate term sentiment surged from Complacency into Ebullience. Bigger declines need more Negative News to Rationalize Sales.
[/newsletterchapter2] [newsletterchapter2 title=”INTERIM SENTIMENT”]
[/newsletterchapter2] [newsletterchapter2 title=”PRICE PROFILES”] The SPX looks like it has completed the 5th wave of (3). If this count is correct, wave (4) should find support between 1955-1945. If those levels fail to hold, the next target would be 1925.
Below 1900 and this count is not correct and something else is going on.