[newsletterchapter2 title=”GENERAL MARKET COMMENTS”] Global Equity Markets ended their upside from February at the July Highs. The Liquidity Gestalt has been replaced by a pandemic Global Uncertainty. Repeat: “The Market has Changed and a Selling Vibration has been initiated.”
Manipulated Markets are inherently Vulnerable which, once revealed, may manifest with shocking moves. Again, the defined Interim High is only 14 days old, thus this Correction remains in its early stages. The initial plunge in the early morning of 8/8 has set up a significant support level. Bounces from there are underway. The current Price Recovery may last into the next node due 8/25. Expect, unexpected price behavior but, Focus on the bigger picture.
[/newsletterchapter2][newsletterchapter2 title=”MARKET TIMING FACTORS”] Again, a larger scale Correction is underway. The next timing node “due 8/25 may be a Big Breakdown.” The 8/8 cogent volatility node, produced a dramatic early morning Low. Everyone sees that now. Yes bounces are and should be occurring but they likely won’t offer a facile Short Entry. Corrective Behavior remains due into 9/20ish and 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 dissipated all of the Complacency. The 8/8 price panic discounted some of these issues but they are far from over and expect that they may become viral again.
[/newsletterchapter2] [newsletterchapter2 title=”RELATED MARKETS”] Gold was “listless but may still surprise once it finds itself.” It continues to Declare its Higher Potential into the Fall. Treasuries remain @ Risk but so far they just simply seem Doomed to be in enervating Ranges.
[/newsletterchapter2][newsletterchapter2 title=”SENTIMENT INTERPRETATION”] The Sentiment interpretation is that an Interim High has occurred. The 9% & 8% Sentiments @ the S&P 1955 Level remains critical. If Bounces do get back into that area, they should fail.
The early morning 8/8 Low was overt and now, obvious. Real Corrections don’t offer easy entries. Prefer some sort of complex, up/down digestion could occur into 8/25 which remains the next key timing node.
[/newsletterchapter2][newsletterchapter2 title=”INTERMEDIATE TERM SENTIMENT”] The 7/24 Extreme was an Interim High and the Market Psyche is still under pressure. The Negatives were finally Recognized. They were initially discounted @ the 8/8 Low. Domestic Politicals may become cogent. This Correction can become viral again, maybe after 8/25. Watch Election issues to come into Focus.
[/newsletterchapter2] [newsletterchapter2 title=”THE TECHNICAL VIEW”] Last week we mentioned if the SPX needed another low, to watch the 1903 as a target. That was the low and we now have a completed 5 waves down.
We are most likely in some type of counter trend rally wave 2, which theoretically could take the SPX back up to the 1973 area. That is a long ways away and the 1955-1960 would actually make more sense. But once this wave completes, we should see SPX trading down to the 1850 area next.