MARKET KEYS: by Woody Dorsey:
- The 6/22 High was IMPORTANT. Declines are expected into late September. The Trend is down but is being masked as a Range.
- Bounces from Key Support @ 2045 have kept Bulls Happy.
- Recoveries into August have occurred as expected.
- We will be providing a Webinar this Thursday (details will be sent to you.) It will be an opportunity for you to ask questions about Sentiment and Timing. I will discuss the difference between a Golden Halo, a Black Hole and a Kill Zone.
MARKET TIMING: The 6/22 High was significant. Repeat: “There is a potential trading target (or, Sell Zone) due: 8/14-21ish. I call this a “Kill Zone.” That is when the Best Breaks may occur. Potential up-trades into 8/14-8/21 would be an opportunity for the short side. That does not mean there is a defined new High coming. Stocks may just back and fill before breaking down. Interim Timing profiles are Bearish.
MARKET TIMING SUMMARY:The Topping Process continues. Equivocal Behavior may occur over the next 2 weeks before more defined weakness. Declines are due to last into late September.
SENTIMENT INTERPRETATION: DORSEY Market Sentiment identified Key Support as being near 2040-2045. Bounces into 7/20ish generated 92% and 90% Sentiment Readings. Then Stocks registered a 4% Bullish after the Decline into 7/27. That all looks like Sentiment Range trading. The DORSEY Intermediate Market Sentiment remains in a “See-Saw” pattern. Intermediate Sentiment last peaked near the price High of 7/20. It has been declining again but it seems to be stuck in some sort of New Neutral!
SENTIMENT SUMMARY:Stocks remain in both a Price and a Sentiment Range. Ranges do eventually resolve into big moves. There is no specific sentiment trading edge right now.
OVERALL MARKET SUMMARY: Equities have been in a Topping Process. Overt Support near 2045ish has been tested several times and has held. Thus, stocks may still appear to be in an uptrend….to some? But, they are really just in a Range. Repeat and as noted for weeks: “Reprieves remain possible into August.” Another Corrective phase is due to begin within two weeks and will last into late September.
TECHNICAL VIEW by Gary Dean: Last week I left the wave count as “IFFY” being I wasn’t sure if there was another push higher to complete the 5 waves. Another push higher is what took place on Friday-which set in motion bearish divergences on both the 15/60 minute charts. We have since seen the SPX do the normal backing and filling, which may take another day or so to complete.
Looking at the pattern structure from 10,000 feet-the high made last Friday fits best as a LARGER wave (A) up and the SPX is now in some type of LARGER wave (B) down. If this pattern holds true, we should then expect a LARGER wave (C) higher once a low is made. The CURRENT pattern fits best as-yesterday’s lows would fit best as a MINOR wave (a) down-today’s highs would be the minor wave (b) up and in the coming hours/days the minor wave (c) down should complete. That would then be the larger (B) on the 60 minute chart.
To sum things up-we should be completing the last leg down of this backing and filling phase-which should end in the 2082-2074 support zone. IF support holds, the SPX should then start a march up to the 2117-ish zone ending between Woody’s 08/14-08/21 “Kill Zone” time frame. I wouldn’t be married to the wave structure above-just keep it in the back of your head if we do see the SPX follow that pattern.
Resistance Levels-2103-2108 outsider 2114
Support Levels: 2088-2082 outside 2074
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Information is for paid customers and may not be copied or distributed Copyright 2015