In yesterday’s Briefing I outlined a perfect strategy suggesting the Stock Indices should see some type of rotation down in today’s trading.  I also stated that analysis would be nullified if two things occurred.  The first was new buyers coming into the market today and moving the Indices above yesterday’s high.  The second was to see volume increase over yesterday.  That is exactly what occurred.  Once the Indices traded and held above yesterday’s high, especially in the first hour, it suggested the alternative strategy was now the higher probability.  Going into tomorrow, the Indices are still at important resistance areas and they suggest an extremeRead More →

In yesterday’ Briefing I outlined clearly the higher probability of a large move in one direction or the other in the Stock Indices.  That was based on a tightening of the market and the inside day.  I also suggested using the extremes of yesterday for trade location today.  That would confirm the direction of the break.  In fact, the break did come with a large day to the upside and the trade location strategy worked perfectly.  Today, the analysis is just the opposite.  Price development suggests today’s move was countertrend and will likely get retraced.  The day pattern is exhaustive in nature and suggests retracement. Read More →

The S&P is still a market in search of value.  Price development suggests participants are unsure of whether value is higher or lower.  However, the NASDAQ appears to be in the process of completing a greater degree timeframe countertrend move.  Trading below 4280 would suggest the next leg down is in the process of beginning.  If the NASDAQ were to fail in turning down, that would give the other Indices the strength they need to rally and potentially test the recent highs in the 2110 area for the S&P.  Watch the NASDAQ. The Dow Transports traded below the 7600 area but have retested the breakout,Read More →

Inter-market divergences persist in the Stock Indices in multiple timeframes.  Longer term, the NASDAQ is in an impulsive move lower.  The S&P appears to be a market that is unsure of whether value is higher or lower.  Short term, the NASDAQ showed more strength at the end of the week by not trading below Thursday’s low, but the S&P showed weakness by trading below Thursday’s low.  If the Indices are in the process of developing another longer term rotation down, which would potentially test the 1800 area in the S&P, then the short term divergences need to be eliminated.  Important to the longer term developmentRead More →

While Yellen’s comments seem to continue to give the Stock Indices fuel to extend the rally, it appears the tank is getting close to empty once again.  From a price development perspective, the Indices have the potential to test the most recent highs.  In the S&P that would be the 2110 area.  However, the structure of the rally is weak and weakening.    On Friday the S&P rallied from a substantial loss to close up 13.5 points.  The NASDAQ closed up over 50 points, after a good loss at the open.  The important aspect is the NASDAQ breadth was barely positive and the NYSE breadth wasRead More →

In Wednesday’s Briefing I outlined the short term oversold condition of the Stock Indices.  While I allowed for the potential for a lower low on Thursday, that would signal the higher probability of some type of move back up to work off the oversold condition.  Longer term, the move down from resistance is developing impulsively.  However, short term there is some indication there could be one more move up to test the recent highs. The Indices closed at their highs on Thursday.  This suggests additional buying could come in on Monday.  If that occurs, watch the internals carefully.  There is a chance it could beRead More →

The Briefing is slightly longer than I prefer, but I wanted to be sure to explain the current development of the Stock Indices clearly.    Longer term, the Indices are in a countertrend rotation that is greater in degree of time and price since the selloff that occurred taking the S&P down to the 1800 area.  While the NASDAQ could still have some upside, the S&P, for all intents and purposes, has completed all of the characteristics of a greater degree timeframe move.  With that said, short term the structure of the move up last week did strengthen.  Therefore, either the move continues to strengthen nextRead More →

The Stock Indices have fulfilled, for all intents and purposes, the characteristics of a countertrend move that is greater in degree of time and price.  While there is still some upside potential in terms of price, the Indices are at an extreme overbought condition.  Volume is very low.  There are glaring intermarket divergences between the S&P, NASDAQ and Russell.  Unless they strengthen from a structural perspective, the next leg down could begin at any time.  If there is a strengthening, which is always a possibility, then it would open the probability for the S&P to test 2112 and then 2135.  As you will see inRead More →

The Stock Indices appear to still be in a countertrend rotation that is greater in both degree of time and price.  In the Briefing, I discuss the fact the 1800 low in the S&P was not the completion of the first impulsive move, as I first thought.  The NASDAQ tells a different story.  The NASDAQ reveals the second test of 1800 in the S&P was the completion of the countertrend move, not the second leg of a countertrend rotation.  As a result, this allows the characteristics of the rotation up to complete at important resistance in the 2030 area.  You will see in the Briefing theRead More →

While the Stock Indices moved higher on Friday, it was a struggle.  All week I have discussed the weakening structure of the move higher.  Friday brought the Indices close to an important upper Key Reference Area.  In approaching that area, volume continued to decline, Breadth continued to decline  and convictive selling came in just as they tried to break through into that Key Reference Area.    The Indices appear to be tightening, suggesting we could see a good move the first part of the week.  Typically, when there are glaring divergences between price and structure, the higher probability is for a good move in the oppositeRead More →