The Stock Indices remain in a trading range.  As you can see from the Briefing, that range has been in effect since the beginning of September.  It may well be they are waiting until after the elections in the US to determine the direction of the next breakout.  Typically, when a market becomes range bound, it is in simple rotation.  Eventually, there will come a break and when it does, it will be a very good move.  The analysis from here will be important to center on the internal structure of short term moves to see whether they are becoming impulsive.  Breaking support, will suggestRead More →

The Stock Indices are testing very important longer term support levels.  So far, each time they have tried to break through that support, convictive buying has come in and driven price higher.  However, the Indices closed near their lows on Friday.  This suggests possible follow through on Monday.  Should that occur, it would put the S&P trading down to lower support at 2110.  Breaking and closing below that level could usher in an intermediate term move lower.  The market internals are not suggesting strength or weakness.  They are basically neutral at this point.  On Thursday, as the Indices traded lower, the internals were strengthening givingRead More →

The Stock Indices continue in rotation and tighten.  This suggests a market that at some point will breakout and there will be a good move in the direction of the breakout.  I am monitoring all of the internals in the Stock Indices to see if they will give a clue as to the direction of the breakout.  So far, it appears the internals are weakening, but that could change.  What is most important, as discussed in the Briefing is the area from 2135 down to 2112 in the S&P.  Trading and closing below that will suggest buyers are not defending that level anymore and it willRead More →

I have just posted the October 2016 issue of The Markets in Development Newsletter.  I hope you will find the description of weighting Market Development against Market Structure based on the current environment for the markets informative.  I have also taken time to point out critical support levels in multiple timeframes that, if broken, will signal a greater degree time and price correction. You can access the Newsletter below The Markets in Development NewsletterRead More →

Stock Indices remain in an area of rotation at or near all-time highs.  As of Friday’s trading, the internals appear to be strengthening somewhat.  More importantly, the Dow Transports broke out above their upper trend line.  This has not occurred in almost a year.  Unless that breakout proves to be false in the coming week, the Transports could be suggesting a longer term strengthening of the Indices.  For now, the trend is stocks is still up.  However, the most critical support area is in the S&P and goes from 2135 down to about 2112.  Until that level is broken, the longer term trend remains up. Read More →

There are large inter-market divergences in the Stock Indices with the NASDAQ making new highs and the S&P and Russell lagging.  Even in the short term, the inter-market divergences can be seen.  While we cannot predict how those divergences will be resolved, they do signal a trend that may not be as healthy as it appears, at least until those divergences are eliminated.  As suggested, the overbought condition of the Stock Indices at the close on Thursday did lead to a rotation down to work off that overbought condition.  The Indices are now basically neutral, allowing for either a rotation back up or a continuationRead More →

Both short and long term, the S&P and NASDAQ are diverging in terms of price development.  Currently, the NASDAQ is showing more strength and potentially giving enough support to the S&P to not break through important longer term support in the 2110 area.  Breaking that area and closing below it will suggest a greater degree time and price correction may be in the offing.  I cannot stress how important that area will be going forward.  Simply look at the number of times it was tested last week and it held.  On several occasions convictive buying came in and drove the Index back above that area. Read More →

It rarely fails.  As I wrote transmitting the Briefing a little over a week ago, the “Joe” indicator has a high probability of occurring.  That indicator says that whenever I take a vacation or have to travel and do not have access to my computer programs, the market makes a large move in one direction or the other.  By Thursday of last week, I thought the indicator had failed, but Friday proved it right again.  In any event, there should have been follow through in today’s trading to the downside and there was.  However, shortly thereafter, convictive buying came in and drove the Indices backRead More →

The weekend Briefing covers some information potentially developing in the Stock Indices that could affect the intermediate term timeframe.  If that occurs, it will certainly have an impact on the longer timeframe in terms of price development.  Longer term, the structure of the current rally is still weak and getting weaker.  Shorter term, we had the highest volume day in many trading days on Friday.  While one day does not make a trend, it will be extremely important to see what happens the first part of the trading week.  If there is a continuation of a move to the downside with the S&P closing belowRead More →

It is important to understand the development of price in any market you trade or invest.  Analyzing price development in multiple timeframes gives us areas of reference for support and resistance.  Additionally, studying the strength or weakness of the structure of the trend will give us a probability assessment of one event occurring over another.  In other words, coming into resistance, is there a higher probability for the market to continue to extend the rally, or will there be some type of rotation down.  If there is rotation down, then it will be important to determine the degree of time and price of that selloff. TheRead More →