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The Markets in Development Briefing for November 13, 2014

While price in the S&P and NASDAQ made new highs today, the structure of the rally continued to weaken.  Additionally, the NYSE and Russell diverged by not putting in new highs and trading lower.  Unless the internals strengthen in the next few days, the probabilities of a move to the downside are increasing.  Watch carefully for the levels outlined in the Briefing to be broken.  If they are, the selling could increase.  It is obvious.  Buyers are unable to drive price in vertical development away from the current rotation.

The Markets in Development Briefing for November 13, 2014

 

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The Markets in Development Briefing for November 6, 2014

Below is the link to today’s Briefing.  Tomorrow will be extremely important in the Stock Indices.  While the S&P pushed to new highs today, the other Indices diverged.  Additionally, the structure of today’s rally was still extremely weak.  The Indices are coiled and have the  potential for a large move in one direction or the other.  Employment numbers are out tomorrow.  They can change the market structure.  However, if there is a rally tomorrow, the last hour of trading will be very important.  If the Indices cannot hold on to early gains, or if they trade lower from the start and close lower, it will suggest at least an intermediate term top may be in.

The Markets in Development Briefing for November 6, 2014

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Below is the link to today’s Briefing. The announcement by the Bank of Japan overnight certainly has thrown a wrench into the analysis.  That event, while likely having serious intermediate to longer term impact on the markets, supported a move to new highs in the S&P and NASDAQ.  I have been discussing the weakness of the structure of the current rally for several days.  That structure did strengthen somewhat on Friday.  However, it must continue to strengthen, if the current rally is to be sustained.  As I have stated before, the higher probability is always for price to correct to the internals, unless there is a news event.  The BOJ announcement may have done that in the short term.  I am still skeptical.

The coming week and the impact of that announcement will be extremely important going forward. Trade with caution on Monday until the real impact has been flushed out.

The Markets in Development Briefing for October 31, 2014

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The Markets in Development Briefing for October 29, 2014

Below is the link to today’s Briefing.  The Fed statement is out and QE is over.  Now we will see if the current valuation of the Stock Indices is sustainable without help from the Fed.  While today’s action was basically “knee jerk”, what happens in the next two days, will be important.  The structure of the market is still very weak, so if the existing levels are to be sustained, it will have to strengthen.  If it does not, we will see more downside pressure.

The Markets in Development Briefing for October 29, 2014

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The Markets in Development Briefing for October 23, 2014

Below is the link to today’s Briefing.  As discussed in yesterday’s Briefing, the move down was countertrend to the rally over the last few days.   Volume today was extremely light, suggesting the rally is countertrend to the impulsive move down from the highs.  The Russell is once again diverging to the downside.  This afternoon the Indices started a move lower.  Volume began to increase.  I found this interesting.  If there is more downside tomorrow and volume continues to increase, it could suggest the move up is complete.  Watch Volume and the Russell.  Finally, the Indices are once again overbought with a divergence in the moving averages of Breadth.

The Markets in Development Briefing

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The Markets in Development Briefing for October 22, 2014

Below is the link for today’s Briefing.  While the Indices have reached an upper level where equality has been met, the move down today was not impulsive.  Therefore, unless we see a lower low tomorrow on increasing volume, the probabilities are such that the countertrend rally is not yet complete.  The extreme overbought condition yesterday has been corrected today.  This allows for a move in either direction, but the degree to which the overbought condition was worked off, suggests we may still see higher prices.  Volume will be the key in the next directional move in the short term.

The Markets in Development Briefing for October 22, 2014

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The Markets in Development Briefing for October 21, 2014

Below is the link to today’s Briefing. The rally today was certainly not at the top of the probability list.  Although, I did discuss the potential for a more complex countertrend rotation up that would take the Indices higher.  It now appears that is the case.  The NASDAQ and Russell have achieved equality at today’s high, but the S&P may extend up to the 1950 area.  The Indices have reached a point of being overbought in all three timeframes that I have not seen.  Volume continued to drop today, suggesting a weak rally.  However, Breadth expanded greatly, suggesting the rally was broad but with not much participation.

I still think the rally is countertrend to the move down from the highs. Unless or until volume confirms the move, the risk is sellers will step back in and we will see another move down to test the lows.

Tomorrow should be very interesting, unless of course, we get more central bankers trying to talk the markets higher.

The Markets in Development Briefing for October 21, 2014

 

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The Markets in Development Briefing for October 20, 2014

Below is the link to today’s Briefing. At this point and unless the structure of the Stock Indices changes, the rally off the lows from Wednesday is countertrend to the move down.  I can allow for slightly more upside tomorrow, but the Indices are poised for the potential of another good move lower.  Typically, the structure of a move will change with a news event.  There are no significant news events, unless there is a surprise Fed announcement.  I do not expect the Fed to take any actual action, but they may try to talk the Indices higher.

The Markets in Development Briefing for October 20, 2014

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The Markets in Development Briefing for October 15, 2014

Below is the link to today’s Briefing.  As suggested in last night’s analysis, the large move lower did occur.  It appeared at first the Fed may be providing liquidity to stop the slide but that was certainly overcome as the selling persisted.  There are now several pieces of information that suggest we may now see some type of intermediate term rotation back up.  Make no mistake.  The trend is down.  It will be important to analyze any rotation up for its countertrend characteristics.

The Markets in Development Briefing for October 15, 2014