[newsletterchapter2 title=”GENERAL MARKET COMMENTS”] The BABA Reversal tells of Market Vulnerability. World War ISIS is underway but popularized. Stocks could have a notable Correction into an October, “Black Hole.”
The 93% Bullish on the BABA IPO may not appear dramatic but, the Price Reversal and Market Hyperbole were. The initial break produced a low 4% Bullish sentiment and a robust price Recovery. But, this does not look like a “Buy the Dip.” Weakness begets Weakness.
[/newsletterchapter2][newsletterchapter2 title=”MARKET TIMING FACTORS”] Stocks Spiked into the profiled 9/19-22 Timing node. My Timing work, based on over 40 years of study, profiles that there is a short term Negative Price Magnet due 10/13ish. Stocks appear to be tipping down into it. Markets are also in a Seasonally weak period. I am less concerned with the very near term trade. There are also additional negative nodes later in the Fall.
[/newsletterchapter2] [newsletterchapter2 title=”MARKETS AS METAPHOR”] Financial Culture has been challenged by the viral re-emergence of ISIS and Ebola. A Spike High occurred but has not generated any really bearish rhetoric. There may be a Cognitive Hiatus right now?
[/newsletterchapter2] [newsletterchapter2 title=”RELATED MARKETS”] As previously noted, “Gold failed to launch when it could have.” Gold is still trying to reverse and is due for 2-3 weeks of Upside. Treasuries are broken but are still having lawful bounces. These sorts of short term rallies are only setting up some new Selling opportunities.
[/newsletterchapter2][newsletterchapter2 title=”SENTIMENT INTERPRETATION”] The Sentiment interpretation is that the Bullish Sentiment Cluster in early September & the BABA High @ 93% Bullish defined an interim High. Yesterdays’ Low 4% sentiment provided a very big bounce. I still think it is too early for this to be a “Buy the Dip.” The Downside potential due into Mid-October should keep providing price pressure. Market Psychology seems to be subtly Changing.
[/newsletterchapter2] [newsletterchapter2 title=”THE TECHNICAL VIEW”] The SPX put in a whopping short covering rally yesterday-that sucked in many buy the dip bulls and washed out any bears hoping for lower levels.
Today’s push below yesterday’s lows confirms the overall weakness-they should not have of been taken out in a strong market! 1972 is the next support line and if that doesn’t hold-1956 would be next in line as far as support goes.