[newsletterchapter2 title=”GENERAL MARKET COMMENTS”] Global Equity Markets have stalled even though, “Peace” has broken out? Except for a “New War” against ISIS. The Liquidity Gestalt still has a market following. The 8/25ish node more or less stopped the upside momentum. I noted the lack of profile clarity over the last week or so.
That strangeness has continued and produced a sideways market. Expected overt Dollar strength accentuated Energy and Precious Metals weakness. QQQ may have the best chance to make new highs. They are a leading tell of generic equity maturity.
[/newsletterchapter2][newsletterchapter2 title=”MARKET TIMING FACTORS”] Near term timing profiles lack cogency. The next node of note remains due near “9/22.” This may manifest as early as 9/18. There is a cluster of date certain events: FOMC: 9/17, Scotland Vote: 9/18, and the Ali Baba IPO: 9/19.
More defined negativity is due in the first two weeks of October. Thus, the 9/18-22 node looks like it could be a Cognitive Breakdown. It may not be a High but a “Breakdown.” We will all have to wait and see.
[/newsletterchapter2] [newsletterchapter2 title=”MARKETS AS METAPHOR”] Financial Culture still seems a bit adrift. Negatives were discounted. Stocks are still assumed to go up into year end. Rates will not start rising until later next year? These Competencies are dangerous.
[/newsletterchapter2] [newsletterchapter2 title=”RELATED MARKETS”] I noted that “Gold failed to launch when it could have and should have. The key market message is that the strong Dollar and weak Energy markets are Deflationary.” Recent trade fits with those ideas.
Treasuries remain @ Risk and have not traded well. Moreover, Bunds are looking more and more tired. They did not rally on the ECB move. We are waiting for a Reversal.
[/newsletterchapter2][newsletterchapter2 title=”SENTIMENT INTERPRETATION”] The 8/8 “Buy the Dip” did result in new Highs. But, the recent Bullish Sentiment readings inferred upside maturity and, stocks have been going nowhere.
The 8/25ish node more or less stopped any upside momentum. Stocks have remained seriously “Sideways,” as we allowed. No change: “Messy, uncertain topping behavior may continue over the next week.” Upside possible but less probable.
[/newsletterchapter2][newsletterchapter2 title=”INTERMEDIATE TERM SENTIMENT”] Stocks returned to a new degree
of Ebullience but the context is equivocal. Market Negatives were Discounted @ the 8/8 Low as confirmed by new highs.
Note below the QQQ history. Prices have been congesting which looks like a typical pattern precursor to a final thrust up. That might occur near the 9/19ish node.
[/newsletterchapter2] [newsletterchapter2 title=”THE TECHNICAL VIEW”] As I mentioned on Tuesday-there are enough waves to count this move complete on a longer term basis. Short term, things are a little foggy-as the SPX has either finished wave 5 of 5 or we are just making a wave 4 down with a wave 5 up to complete the pattern.
Either way, it appears to be on borrowed time, even if another push higher is needed. The risk definitely on the bulls side here-being IF this wave count has completed, a much larger drop is pending-upside may be limited to 2020-2030 if higher is needed.