Next week is a holiday week.  Volume will be extremely low.  That allows for any large fund to distort price development.  While this time of year is typically bullish, there are many news events that could affect current trends.  If you are short term trading, use the areas of good trade location outlined in the Briefing.  On a short term chart, watch volume.  It should be increasing, if even slightly, to support the move in the direction of your trade.  Otherwise, comparing the short term internals to previous development and price support will be worthless.  Longer term price development on the recent move up isRead More →

The Briefing for this weekend begins with a longer term analysis of the Stock Indices and then brings it down to the short term.  It is clear from this analysis the rally to the recent highs, was being accomplished on a weakening structure.  This was covered many times.  While I outlined this in the Daily Briefings, the decline that began last week did not start out impulsively either.  With that said, the impulsiveness began early this week and completed on Friday with what appears to be a slight strengthening.  Friday saw lower prices with higher Breadth than on Thursday.  Unless that divergence is eliminated onRead More →

The weekend Briefing discusses the long term development of the market and its weakening structure along with the short term development.  While a test of the highs and new highs are certainly a possibility in the short term, unless the Indices can strengthen internally, be aware of a growing possibility of a trend reversal and another possible test of the August lows.  Intermarket divergences now exist between the Russell and the NASDAQ; the NASDAQ 100 and the NASDAQ Composite; the Dow Industrials and the Dow Transports; and the NYSE has yet to trade substantially above significant resistance.  Volume is declining.  If you breakdown volume, there isRead More →

There are two important aspects of analysis of any financial market.  The first is understanding the development and structure of price and second to understand price development in multiple timeframes.  As you will see in the Briefing, price development suggests the potential for a test of the all-time highs.  However, the structure of that development in multiple timeframes is weak and weakening.  This would then warn of an impending turn back to the downside, unless the structure were to strengthen and support price in all timeframes.  The same weak structure occurred just prior to the August selloff. Important support will be the 2030 to 2050 area inRead More →

On Thursday the ECB’s hint of additional quantitative easing gave the Stock Indices enough fuel to eliminate the structural divergences that existed going into Wednesday’s high.  However, in the S&P those divergences reoccurred on Friday.  Friday’s advance in the NASDAQ was supported by the internals.  However, the Russell is lagging significantly at this point.  Longer term there are still structural problems, especially if you breakdown volume.  Volume is declining on the rally but the amount of advancing volume is falling significantly.  This suggests fewer components that make up the Indices are being moved higher and more are being sold.  This is a significant fact thatRead More →

Just as I outlined in Wednesday’s Briefing to be aware of a rotation up as a result of the divergences in market internals, so too, we must be aware of the divergences that occurred in Friday’s trading that suggest the potential for some type of rotation lower.  Even if there is a move above Friday’s high, if those divergences are not eliminated, expect rotation down.  If the divergences are eliminated, then we will likely move higher and the probabilities are increasing for a possible test of the all-time highs.  The longer term development of the Stock Indices will likely be decided the first part ofRead More →

Below is the link to the weekend Briefing.  As I discussed in Thursday’s Briefing, the Stock Indices are likely at a decision time period that should have culminated on Friday or this coming Monday.  Friday saw the S&P make a slight new high but then rotated between a significant resistance area of 2000 to 2010.  The structure of the move into this area has been weakening.  This suggests the higher probability may be developing for a rotation back down.  This would be negated by a move above Friday’s high on increasing volume and strengthening breadth.  Adding to the lack of strength in the move isRead More →

Below is the link to the weekend Briefing.  It is always important to understand the environment of the markets we trade and invest in.  Along with that is realizing when a news event can change the development of price and the structure of that development.  While the news event on Friday was not positive, the market participants interpreted it as being good for stocks and the Indices made a substantial reversal with the S&P having almost a 60 point range for the day.  Therefore, what was the lower probability event became the higher probability as a result of that news event. Based on the above,Read More →

Below is the link to the weekend Briefing.  The reversal in the Stock Indices on Friday was significant, especially in the NASDAQ.  There should be follow through on Monday.  Consider the fact buyers had an opportunity to move the Indices higher and hold them at upper levels.  But, they were not strong enough to sustain the move.  Sellers stepped in and the range was retraced with the NASDAQ closing down over 40 points.  If buyers are not strong enough to hold current levels, sellers will begin to take control. I fully expect to see the August 24 lows tested and traded through.  In the S&PRead More →

Below is the link to the weekend Briefing.  For the past two weeks the analysis suggested the move up off of the August 24 low was a countertrend rotation, suggesting there was going to be at least one more leg down that would test and likely trade through those lows.  While the FOMC announcement could have changed that analysis, it did not.  In fact, the reaction of market participants suggest we may be in the process of beginning the next leg lower. The Indices are not oversold at this time, meaning there may be additional follow through the first part of the week before reachingRead More →