MARKET POINTS: by Woody Dorsey
- The 11/3 High remains as a cogent Resistance level. The dramatic Bottom on the 3% and 1% Sentiments near 11/16 remains as cogent Support. Thus Ranges within Ranges continue. The acute 93% Bullish yesterday coincided with a very defined price reversal which is continuing. Weakness is certainly preferred into the long anticipated 12/7-10 zone.
MARKET TIMING: Yesterdays’ breakdown fits well with timing pattern. It will be interesting to see how we trade on Monday. There is big data tomorrow and Stocks are getting oversold, on a very short term basis, so bounces can occur.
TIMING SUMMARY: Stocks remain due for weakness, of indeterminate degree, into 12/7-10. How far they decline will be very telling.
SENTIMENT INTERPRETATION: The DORSEY Market Sentiment extremes of 1% and 3% occurred @ the 2025ish level. It is amazing how price Lows occur Low sentiment! Then the 93% Bullish yesterday occurred on a new trading high before reversing. So interesting. However, as noted many times, Sentiment always has to be interpreted and looked at in terms of Timing and Technicals. The DORSEY Intermediate Market Sentiment had quite a Recovery and now seems to be turning down. There is clearly more time for deterioration.
SENTIMENT SUMMARY: Sentiment hit an overt extreme on the the 3% and 1% Readings and another extreme on the 93% Reading. Thus these levels become cogent indicants of the Range.
OVERALL MARKET SUMMARY: There is no proof yet that anything 0ther than Range Trading is occurring. But, it is finally exciting. Still weakness has been due. The 12/7 & 12/10 dates were due to be negative. So, there is no reason to buy this break or to be friendly towards the market.
TECHNICAL VIEW by Gary Dean: The SPX saw a quick drop down to the support zone that the bulls will try to defend 2068. If they lose that support, 2062/2060 should come quickly. There is fib support at 2052, but lack price support and 2045 would make more sense for a bounce if it gets down there.
The bears need to defend the 2088 resistance level to maintain short term control. Above that resistance line, opens the door for 2095/2104. There were defined bearish divergences on the short term charts, which have been worked off with today’s drop. The bearish divergences on the daily charts, should have the bulls a little uncomfortable and suggest lower still is open-even with bounces along the way. 2080-2088 looks like a solid resistance zone for a turn lower.
- Resistance Levels-2080-2088-outsider 2095
- Support Levels: 2068-2062 outsider 2052
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