[newsletterchapter2 title=”GENERAL MARKET COMMENTS”] The 10/15 Capitulation at the “Ebola Low” was very significant. Equity weakness was due to manifest by yesterday. I had noted the tells in Global equities. They are all confirming of this new Correction.
[/newsletterchapter2][newsletterchapter2 title=”MARKET TIMING FACTORS”] Market energy due near 12/8ish has resolved as a Top. This corrective vibration is due to last into at least 12/22ish. Thus, scalping short is the market play to play for now.
[/newsletterchapter2] [newsletterchapter2 title=”MARKETS AS METAPHOR”] Financial Culture Complacency is unravelling.
[/newsletterchapter2] [newsletterchapter2 title=”TIMING SPOTLIGHT-GOLD”] I wanted to clarify what I revealed last week. Capitulations and Price Plunges on “News” are relational tells of Sentiment and can identify cogent Risk Management parameters.
The 11/7 Capitulation in Gold identified a Stop. Then, the decline and subsequent Recovery post the Swiss vote was an additional Tell and a Proof of strength. That trade is shown in the chart below. I noted that the inside days looked like a Buy set up. It was. Reversals on News can be telling. Gold is a trade, not a Religion.
[/newsletterchapter2][newsletterchapter2 title=”SENTIMENT INTERPRETATION”] The best Sentiment interpretation remains that the “0%” sentiment was a critical interim Low. Note that over the last 2 weeks, Sentiment has been flattening as indices have been pushing up towards new highs.
This behavior is penultimate to a Correction which is now occurring. This supports the ideal profile for weakness into 12/22ish. The S&P has constructed a ceiling near 2078ish to short against.
[/newsletterchapter2][newsletterchapter2 title=”INTERMEDIATE TERM SENTIMENT”] Intermediate Sentiment has finally rallied hard enough from the 10/15 Black Hole to look like a potential interim extreme. If the current correction can continue with cogent price bars and, more importantly, some Negative daily sentiment, an
interim High could be in place. So, a significant reversal may be brewing.
[/newsletterchapter2] [newsletterchapter2 title=”THE TECHNICAL VIEW”] The bearish divergences are still very clear and APPEAR to have finally started weighing on this move highs. The downside target remains near the 2020-2000 area. A break below that-would cause some panic.