MARKET POINTS: by Woody Dorsey
- Repeat: “Pundits may remain flummoxed. They do not realize that the Market has Changed.” U. S. Election Escapades will tend to expose what is wrong, rather than what is right, with Financial Culture. Politicians are genetically disposed to “find fault” with everything. Those negative vibrations will keep infecting Financial Culture.
- I reiterate: “Bounces may be confusing and might not last all that long. Stocks are likely to go LOWer4LONGer than anyone expects.” Everyone knows that now so it is likely that a confusing Recovery is near.
- Very near term diagnosis: I noted last week that the 1/20 plunge produced a long tail on the probe to 1812ish and might be a Momentum low.” My Diagnosis: The 0% (1/19) followed by the price plunge on 1/20 does now read as a cogent Momentum Low. Upside into 1/26-27 B4 setbacks into 2/5-8ish.
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MARKET TIMING: The Preferred Pattern called for, “another Low due nearer to early February.” Upside was allowed into 1/22ish and that may last into 1/26-27. Declines due near 2/5-8ish could resolve into strength as late as dates are for members only-join now
TIMING SUMMARY: This is still a dangerous market. Prefer to wait for the most overt indicant for an interim low due near early February.
SENTIMENT INTERPRETATION: The DORSEY Market Sentiment registered several daily Highs in December which were clues of an eventual breakdown. Over the last week there were numerous daily sentiment lows and the 0% bullish on 1/19 looks like a decent extreme.
The DORSEY Intermediate Market Sentiment registered levels of pessimism not seen since the 8/24/15 and 10/14 Lows. I repeat my interpretation: “It may be signaling a price low in the making.”
SENTIMENT SUMMARY: Sentiment Behavior has been “best interpreted as being generically Bearish. It now appears that a pessimistic extreme was achieved last week
OVERALL MARKET SUMMARY: Stocks remain in an overall Corrective Phase. But, the Big Picture is not our focus here. The 1/20 Low has some cogency. More upside possible but setback due into 2/5-8 when odds are better for a durable Recovery.
TECHNICAL VIEW by Gary Dean: The SPX had a nice bounce on Friday and is now pulling back some off of the bearish divergences on the short term charts. It is approaching some support at 1892-1886 and if the bulls are going to try-it would be in that area. If they fail to hold that support, then we can assume the next support level is in play at 1872-1860. There are no bearish divergences on the 60 minute charts-which suggests this is just a pullback before we see another try higher. 1920-1944 would be the upside targets I will be watching, but the support levels have to hold for that to even come into play.
- Resistance Levels-1908-1933-outsider 1948
- Support Levels: 1859-1846 outsider 1835
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Information is for paid customers and may not be copied or distributed Copyright 2016