Woody is on vacation until next Monday (08/08/22) Below is what he wrote on 07/28/22 and will remain there for your viewing until he gets back. The technical aspect of the report will be new content for each report. G-
MARKET ENVIRONMENT: by Woody Dorsey. Sentiment came in today at @ 93% Bullish. The see saw continues. The 0% sentiment reading on 6/14 turned out to be a good trading low. Interesting how well a simple 0% works. But that was always going to just lead to bounces. And so it goes. This timing pattern still allows for serious hiccups next week. Be prepared for the full force of Uncertainty. Good news is suspicious in this environment.
NEAR TERM: big pops on a 93% bullish are suspect. There is an opportunity for another sharp drop near, the end of July into August. We are just about there. Take care.
INTERIM TERM: The Interim profile still suggests that the best low of the year may not occur until the fourth quarter. Remain wary. Don’t Believe that you understand all the Risks in these markets.
DORSEY MARKET SENTIMENT: Bullish Sentiment for equities has been overly optimistic for a decade. The 0% on 6/14 bullish “told” of a typical trading low. But, Sentiment has now rallied back towards questionable levels of optimism. Down. There is the possible risk of a severe sentiment declines over the next few weeks.
MARKET SUMMARY: Repeat: “Equity Markets remain under secular corrective pressure. Wars never end well, nor will, 2022. This is still a Market War. Bounces don’t Change that. It will not be an easy Summer from here. This is not a Market to believe in.
TECHNICAL VIEW by Gary Dean: The sloppy choppy trading environment is in place and we have to stay in trade mode and keep an open mind with direction for the short term. The upside target I believe will be tested is the 4187-ish resistance. If the bulls can get and stay above that line, then we should see 4340-ish as the secondary top. I am still looking at this as a dead cat bounce, which are viscous in bear markets and the primary goal for these bounces is to get everyone believing the lows are in.
I am FINALLY starting to see many talking heads trying to convince the peeps that the lows are indeed in place. I will leave that to them and I will trade the charts, with the belief that the lows are NOT in yet and once they are all in, we will take the 3640 lows out and make our way closer to 4000 spx. The weekly 200 dma is the first upside target and if you look at the daily chart below, you will see the 200 dma is resting at 4343 and why I have that as a secondary target.
I pointed out the fractal pattern in the video reports which is suggesting some very sloppy tape in the very near future-which may or may not have started already. Look at the topping pattern as we entered into the June time period and that is what I am expecting for the next few weeks. 4040/4010 is a place I would be INTERSTED in looking at a long trade up to the 4185 target 1.
You can see the uptrend line matching up with diagonal support right at the 4010 line. If we get down there and I see buy signals, I am not against looking long. If that fails to hold off the bears, then 3940 will come in as the next downside target.
Summary: The safest way to trade this market is to short rallies-THAT HAS NOT CHANGED! The choppy/sloppy tape continues and if I see the 4040/4010 support hold, I will be looking long. If the bulls just try and press higher, I will wait for the next short entry. It is that simple. I don’t need to be stressed about a direction when I don’t believe we will see a clear direction for the next few weeks. Just dips getting bid back up and rallies getting sold. G
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