[newsletterchapter2 title=”GENERAL MARKET COMMENTS”] Global Equity Markets ended their upside epi-sode from the February Lows. The Liquidity Gestalt has faded in importance. Repeat: “The Market has Changed. A Selling Vibration has been initiated.”
Dramatic declines may manifest into the Fall. “Manipulated Markets” are inherently Vulnerable. The 7/3, CupCake Crumble and the 7/24 Highs were significant Tells of the Topping Pattern. Again, with a defined Interim High only 11 days old, the Corrective Vibration is really just beginning.
Portfolio Patience is Passé. The 2% Sentiment on the initial plunge to 1917ish was re-tested but Hopeful Recoveries have not been robust: “Upside won’t be smooth or easy.” The Market has changed. So, Expect, unexpected price behavior. Time to focus on the bigger picture for now.
[/newsletterchapter2][newsletterchapter2 title=”MARKET TIMING FACTORS”] Given that a larger scale Correction has begun, very near term behavior may be moot. Minor timing allows for upward tries into 8/8 & 8/18. The 8/25 timing node may be a Big Breakdown.
The 8/8ish turn is a cogent volatility node, best contextualized as a Trading High, but we are wary of trying to be too exacting about the near term at this stage of the Decline. Corrective Behavior remains due into 9/20ish and also further on into the Fall.
[/newsletterchapter2] [newsletterchapter2 title=”MARKETS AS METAPHOR”] Financial Culture has abandoned the “Happy, Happy, Happy” Song. An Accumulated Causation (Paraptakarma) of Negatives was Recognized and Complacency is dispelled. Ebola, Gaza and Others.
[/newsletterchapter2] [newsletterchapter2 title=”RELATED MARKETS”] Gold was “listless but may still surprise once it finds itself.” It has Declared its Higher Potential into the Fall. Treasuries remain @ Risk as the Yellen “Coo” is fading but they simply seem Doomed to enervating Ranges.
[/newsletterchapter2][newsletterchapter2 title=”SENTIMENT INTERPRETATION”] The preferred Sentiment interpretation is that an Interim Optimistic extreme is in place. The 9% & 8% Sentiment @ the S&P 1955 Level is Key.
If and when Bounces do get back to that area, they should fail. I had preferred that the 8/2 levels were a temporary Low but Recovery Potential has been muted. This confirms that a Real Correction is underway. Short term waves and wiggles are seductive.
[/newsletterchapter2][newsletterchapter2 title=”INTERMEDIATE TERM SENTIMENT”] The 7/24 Extreme was an Interim High and the Market Psyche remains under pressure. Declines represent Recognition of All of the Negatives. Domestic Politicals may yet
become even more cogent than the Geopoliticals. Corrections can become very viral. Watch the upcoming Election issues. Don’t Deny the Downside.
[/newsletterchapter2] [newsletterchapter2 title=”THE TECHNICAL VIEW”] When looking at the 60 minute chart of the SPX, we can clearly see 5 waves down. There are no bullish divergences, which leaves the door open for another new low. These moves can extend, but once a low is in place, a counter trend rally-wave 2 up would be deck.
The daily chart below shows possible support areas. Watch the 1903 if a low has not been made yet. Upside could be quick, but limited with the next move lower, being even more powerful than the current one.