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 →

As you will see in the Briefing, the internal structure of the Stock Indices is continuing to deteriorate.  Stocks are tightening and suggest another breakout is in the offing.  While we may see another day or two of upside rotation, unless the internals change, there will be some type of corrective move to the downside.  I fully expect the Fed to be in control of any rotation down until the election, so it may only be a rotation that would test the 2140 area in the S&P.  That is important support.  I am working with a group on a computer model for individual stocks.  ItRead More →

The news event (employment numbers) on Friday morning changed the structure of the Stock Indices to some degree.  Most of the divergences in Breadth were eliminated but volume was extremely weak.  New highs for the week did not suggest a breakout and up volume declined for the week as well.  This all suggests that unless we see a continuation of the strengthening of the market internals, we may see a retest of the breakout point.  In the S&P that point is 2170.  As you will see in the Briefing, the development of the Stock Indices in multiple timeframes is at critical levels.  Either they strengthenRead More →

I planned on publishing the August Newsletter at the beginning of next week.  However, the current development of the Stock Indices, especially after Friday’s trading, is very important.  I believe what happens the first part of the week could be very informative. All three Indices covered are at different important short, intermediate and longer term Key Reference Areas.  Any move higher puts them in vertical development.  However, a failure to move much above Friday’s highs will suggest weakness and the potential for some type of rotation down. The development of price and the structure of that development may have a dramatic impact on all timeframes. Read More →

Longer term, the Stock Indices are at important upper extremes with the S&P actually breaking out above that resistance.  The NASDAQ is right at long term resistance in the 4740 area.  However, going into that resistance, the internals have  been diverging from price and suggesting there should be a turn back to the downside. As you will see in the Briefing, if you look into what is occurring on a shorter term timeframe, the Indices are beginning to show some strength.  Volume is increasing.  Breadth is moving higher.  Up volume is increasing and new highs are once again breaking out.  While inter-market divergences still exist,Read More →

Price development in the Stock Indices continues to want to go higher.  The problem with the current trend is the structure continues to weaken.  As you will see in the Briefing, unless more instruments that make up the Indices begin to participate in the rally, it will not be sustainable.  It is always a higher probability for price to correct to the internals.  However, I must state there is always a possibility the internals will correct to price but that is typically around a news event.  If and when the selling begins, I have outlined extremely important lower support levels.  If those levels are broken, theyRead More →