MARKET POINTS: by Woody Dorsey
- The Recovery from the Double Bottom was rejected @ Range Highs on 11/3 which has become a cogent reference time and price indicant. A dramatic micro Bottom occurred on the 3% and 1% Sentiment extremes near 11/16 which I alerted you about. “Positon traders can continue to view Stocks as being in a downtrend from that 11/3 High into the first week of December. But, again, all of this behavior is best viewed as being Volatility within existing Ranges.”
MARKET TIMING: Profile remains: “Indicants for potentially overt weakness in the first part of December. The ideal time zone to set shorts remains due nearer to Thanksgiving (11/20-24.)”
TIMING SUMMARY: Bounces are ending but could drift around into early next week. Prices unlikely to travel much farther in terms of Price but could still eat up a bit more Time.
SENTIMENT INTERPRETATION: The DORSEY Market Sentiment “Rallied” had into early November. The extreme 1% and 3% Sentiment timed the recent low but today is 90% Bullish signaling that the PARIS Negative has been neutralized. That suggests that substantive further upside may not occur.
The DORSEY Intermediate Market Sentiment registered notable optimistic levels and Sentiment Divergences at the 11/3 highs. Sentiment has drifted back down towards neutral levels but there is no typical pessimistic extreme as yet.
SENTIMENT SUMMARY: Sentiment hit a hard bottom on the 3% and 1% Readings and had typical bounces. The Sentiment Recovery was due to “take a few days.” It has. Upside excitement seems to be over but there is not downside initiative as yet.
OVERALL MARKET SUMMARY: Market Probabilities favored a short-lived bounce from Monday. That is now already well along. Another potential tactical Sell pattern is shaping up over the next few trading sessions. Weakness is then due into the week of 12/7. I am watching each day of trade for better clues of the onset of a new downtrend.
TECHNICAL VIEW by Gary Dean: The SPX found support at the 38% support line and has rallied to the initial upside target of 2079. Since it took out that resistance line fairly easily, the door is open for a push to the next resistance line-sitting at 2095. There are no bearish divergences yet, but momentum is approaching overbought levels. From a technical view, remain open minded for now. Divergences should start to form and then I would want to see how price reacts at resistance. Tomorrow is options expiration, so we could see some volatility in the coming days. A move below 2067 would be the first clue that the move higher is in jeopardy
- Resistance Levels-2087-2095-outsider 2102
- Support Levels: 2071-2067 outsider 2053
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Information is for paid customers and may not be copied or distributed Copyright 2015