[newsletterchapter2 title=”GENERAL MARKET COMMENTS”] Global Equity Markets continue to exhibit generic
strength on the persistent dominance of the Liquidity Gestalt. This is amazing in the face of any all the activities in every sort air space. To repeat: The overall preferred pattern was, “Rolling, diverging strength could continue for more of the Summer.” Summer is passing but is not over.
We allowed that Corrective episodes, like the last week or two, could be followed by some upside into Mid-Late August. If an overt and “Phat” High occurs, a potentially dramatic decline may manifest. Repeat: “This is still a Manipulated Market. Don’t Believe in any of it.” The 7/3, DOW 17K, CupCake Crumble, Extreme was “only another diverging momentum High.”
As noted: “There may be a sweeter Sell spot yet to come.” It does and has all argued for Perseverance and Patience over the next few weeks.
[/newsletterchapter2][newsletterchapter2 title=”MARKET TIMING FACTORS”] The profile allowed for strength into the
end of Q2 and the July 4th Holiday followed by some corrective potential. The declines from that “Holiday High” began to be scary but stocks held. It was a “Dip to Buy.”
It fits with our profile for some final diverging strength into August B4 a larger scale Correction. Now, breakout energy is occurring. 7/24 has some cogency and now looks like acceleration node. Other minor turns are due 7/28 and 8/1 and, may be highs. Timing allows for more nominal upside into month end.
[/newsletterchapter2][newsletterchapter2 title=”MARKET METAPHOR”] Financial Culture is still singing its “Happy,
Happy, Happy” song. Scary Air Spaces and Rocket Launchers have not meaningfully altered these incredibly Booring markets. Complacency still prevails.
[/newsletterchapter2] [newsletterchapter2 title=”RELATED MARKETS”] Gold deserved some pullbacks but they don’t alter the relatively Bullish profile. Treasuries didn’t breakdown when they could have. That told of more ridiculous Short Covering. Yellen keeping the cooing coming.
[/newsletterchapter2][newsletterchapter2 title=”SENTIMENT INTERPRETATION”] The preferred interpretation of Sentiment Behavior has been “Generically Bullish.” But, the larger timing pattern is maturing. The 97% Bullish on 7/7 is now revealed as only a momentum High.
The Corrective behavior from there could have but did not become viral. Thus, we allowed that the 9% reading may have only been a “Dip.” It was. There is still an underlying Psychological Bid Bias.
[/newsletterchapter2] [newsletterchapter2 title=”INTERMEDIATE TERM SENTIMENT”] The 97% on 7/7 occurred during relatively extreme intermediate term sentiment. But Equities still remain in an Ebullient state. Thus, the Investor Psyche is Vulnerable but more Durable and more Viral Negative Stories are required.
Domestic Politicals rather than Geopoliticals may be more important to watch.
[/newsletterchapter2] [newsletterchapter2 title=”PRICE PROFILES”] Last week I left the door open that we could still be making another wave (4) down. That door is still open as the channel line held and the SPX has rallied. It seems like we are in the final innings of this push up. The overlapping of candles is HINTING that this is some type of topping process. Maybe it will take the round number of 2000 to see some real selling?
If we did make another wave (4) down, the expected wave (5) should be the final push and the top of the channel is between the 1995-2015 zone, depending on when it gets there. But until we see SPX break the rising channel, the bulls remain in control.
There is also a chance we are forming an expanding diagonal pattern. That is where we make higher lows and higher highs. It is a topping pattern-but could call for more upside before completing!