MARKET POINTS: by Woody Dorsey:
- The Price Highs on 5/20, 6/22 and 7/20 in different indices have described a significant Topping Process. Any Bull market continuation is dependent on those highs being exceeded. So, you know here your stops, physical or mental, are! Upside tries are still possible over the next week or so before a more cogent Decline is expected into late for members only-join now to see dates, Today’s 94% Bullish reading and sharp pullback fit the pattern of a Market that wants to go down but has not yet been able to release to the downside.
- Key Support @ 2045 continues to offer Bulls solace. Now, a new layer of Support near the 2067 Level has been defined. The technical tightrope is tightening. This may be typical of the fussy equivocal trade which often occurs before a real move begins.
- Recoveries have continued as expected but are becoming more and more precarious.
- To Clarify: a “Golden Halo” is a High where everything looks positive. A “Kill Zone” is the time frame when a Decline become obvious and overt. It is “Recognition” of the Negatives. A “Black Hole” is when markets “Freak Out” and investors Capitulate. It does not usually last very long.
MARKET TIMING: A well-defined Top is in place. Repeat: “There is potential timing for a Sell Zone or, “Kill Zone” due: for members only-join now to see dates. These set ups occur after Highs are already made. As noted: “Stocks may just meander a bit more before breaking down.” That is what they are doing! A Low due in late for members only-join now to see dates should begin to provide negative pressure. I noted in the Webinar that there were 2 Black holes coming due. I might call one a Beige Hole and the other a Black one. It suggests a compound decline. The point for now is that there is Negativity lurking. These things are not absolutely defined but are Probabilities. I remember one year where the Dow bottomed on 8/30 but the S&P did not bottom until 10/5!
MARKET TIMING SUMMARY:Rangy Trade could continue but not for too much longer. Don’t get caught up in minor technical traps here. This is a market situation where the short term is much less important than the interim Term! Weakness is due into late for members only-join now to see dates.
SENTIMENT INTERPRETATION: DORSEY Market Sentiment identified Key Support as being near 2040-2045. That Level remains a critical boundary of the Range. Support has been furthered announced by market behavior @ 2063-2067ish. While the market was quite heavy most of last week, it did not freak out! Thus Friday only produced an equivocal 12%. Monday’s enormous up-trade produced a 94% Bullish! The market is getting more and more interesting.
The DORSEY Intermediate Market did peak near the price High of 7/20. It declined but is nearing Neutral. This seems to be signaling complacency more than anything else. Thus, Sentiment behavior is not in alignment with the Price Pattern.
SENTIMENT SUMMARY:Sentiment Ranging continues. A defined cohesion with Price and new Negative market stories has not yet occurred. It is always dangerous to make assumptions but the most cogent market inference seems to be that Stocks can and will break down but not just yet.
OVERALL MARKET SUMMARY: Equities are in a Topping Process. Overt Support near 2045ish has been tested several times and has held. Stocks are in an ever tightening Range. My Market work argues that they will break down and we are nearing a time frame when that is due to begin. Ranges do eventually become resolved.
But, Markets do unexpected things. In this case, the Upside Resistance is very well defined. Again, you know where your stops need to be! My profile has proffered for weeks that: “Reprieves remain possible into for members only-join now to see dates.” This is occurring. The market is behaving as expected even though it has not been Easy to Trade. Another Corrective phase is due to begin and to last into late for members only-join now to see dates.
TECHNICAL VIEW by Gary Dean: The SPX has been in a consolidation period since July. The consolidation is coming after a big drop-so it would suggest the break of this consolidation will be to the downside, which is matching up perfectly with Woody’s price breakdown profile. We can clearly see a series of ABC patterns within abc patterns. The best fit right now-is that the SPX completed the larger wave B down (in black) and now appears to be forming yet another smaller abc pattern (blue)
If the SPX finds support/buyers between the 2086-2075 and heads higher, it should be the final thrust higher before the expected breakdown out of this consolidation. Of course, you have to keep an open mind that this isn’t the pattern, but until it proves wrong, it is the best fit for both price patterns as well as Woody’s time profiles. 2118 would be the upper target if higher is needed. Below 2075, we may have already seen the high.
Resistance Levels-2105-2113 outsider 2118
Support Levels: 2086-2082 outside 2075
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Information is for paid customers and may not be copied or distributed Copyright 2015