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Global Equity Markets have continued to exhibit generic strength as ratified by new Highs. This was not unexpected. Again, “rolling, diverging strength could continue for more of the Summer.”
But, Summer is moving right along and it will be followed by, Fall. If this weird Liquidity complacency can persist into August, an important, perhaps dramatic Vulnerability profile may manifest. Repeat: “This is a tricky market for traders. Don’t try for Big trades.” It is a Manipulated Market. That means that you can’t fight it!
Don’t Believe in any of it. We all have to wait for clarity and better trade set ups. Expect, “More expected Boring trade.” It was, has been, and is good advice.
[/newsletterchapter2][newsletterchapter2 title=”MARKET TIMING FACTORS”] Generic strength continues to overwhelm near term tactical patterns. We noted that: “The timing sequences over the next 2 weeks are not that declarative. There is a minor pattern 6/25-27 which may produce a quick setback but the end of Q2 and the July 4th holiday week are nominally positive.” That is how it has unfolded.
There is an unusual timing pattern due 7/14-16. I am presuming that stocks will break down into there from some sort of Holiday High this week. If so, that setback may just set up another episode of final diverging strength into August B4 a larger scale Corrective episode can occur.
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[newsletterchapter2 title=”MARKET STORIES”]Financial Culture remains very “Happy, Happy, Happy,” as the song goes. It is all incredibly Booring. Waiting for some Real Markets.
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[newsletterchapter2 title=”RELATED MARKETS”]Gold turned up smartly from a secondary Bottom. It may be subject to minor Congestions within its new uptrend. Treasuries remain in a strange Range before they embrace Reality. If Stocks and Stuff keep on soaring, Janet Yellen may have to stop her infernal Coo-Cooing. She may be trapped.
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[newsletterchapter2 title=”SENTIMENT INTERPRETATION”] My interpretation of Sentiment Behavior for some months has been “Generically Bullish.” Thus recent persistent strength was not unexpected. The 94% Bullish (5/13) was a Breakout signal. Yes, High sentiment can be Bullish!
The cluster of very High sentiment near 6/19 only produced a temporary momentum high. Intermediate term sentiment has surged from Complacency towards ebullience. Again, what a Bearish view needs now is some new Negativity.
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[newsletterchapter2 title=”PRICE PROFILES”] The SPX continues to grind out this 5th wave. It looks like it may be running low on steam, as seen by the bearish divergences. 1980 makes sense for a possible reversal spot.
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