Friday, July 28, 2017

Slow Day

Market Outlook: Highs are likely in for S&P500, ES, NQ, and RUT, not so the DJIA
Market Indexes: RUT: lower low day; SP500, ES, NQ: sideways; DOW higher.

In another slow day of summer trading, the Russell 2000 continued leading to the down side with a lower low day today. The Dow continued to make higher highs as it apparently struggles to finish a contracting diagonal. A chart of that continued diagonal is below. Note that wave (iii) is still shorter than wave (i). Trend lines will be adjusted as needed.

DJIA Cash - 4 Hr Chart - Potential Diagonal

Sometimes, they like to keep these diagonals going on seemingly forever, as money tries to rotate into the perceived safety of large cap defensive names, after leaving some of the smaller and more speculative issues.

The S&P500 made only an inside candle today. Whether yesterday was a first wave down or just an "A" wave down is still up for grabs. We're watching to see whether the market forms one of two upward structures, those being either a double-zigzag, upward, or a triangle. (By the settlement a triangle had not invalidated yet). If a triangle forms, it would definitely more credence to the A wave case. If the double  zigzag forms then, it might lend more credence to a first wave scenario, but still the odds would be about even in that case. Again, favoring the A wave case is also the fact that the retrace has been deeper than 61.8%.

The NQ futures chart, by contrast, has the makings of a flat correction, as the 90% retrace level of the three upward waves was made this morning. Here is that chart.

NQ Hourly Futures - Likely A Flat Correction as 90% Was Reached


Anyway, we note now how remarkably bullish some people are - even given the seasonal nature of declines in the August / September time frame. And, just a reminder, August is only two trading days away, with a solar eclipse in the middle of it!

Well, until then, there is a fun weekend to have ahead. So, here's hoping you get a good start on it.

Perhaps there will be some more over the weekend.
TraderJoe


5 comments:

  1. August of 1929, the markets rallied 8%. Everyone was bullish in 1929, especially over the summer. There's no reason not to expect large final rally into Sept to mark the top. Anytime the market tries selling off, buyers bid it back up. That's strength we have to respect. The crash will be historic, should happen by Oct/Nov. I'm following the 1920 to 1929 market cycle. The Great Depression 2.0 is virtually guaranteed to start later this year.

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  2. Thanks Joe. What is the significant of a solar eclipse?

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    1. Data from The Telegraph (U.K.)

      One of the more surprising events to exert an apparent influence on markets is the solar eclipse.

      Since 1900, 15 total solar eclipses have been visible from American soil.

      On the day of each eclipse, and on the day before, the average return of the Dow Jones index has been minus 0.3pc.

      The average for the day after the eclipse has been 0.2pc.

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  3. the 45 degree angle between Uranus and Neptune is geocentrically exact on August 11 (between the lunar eclipse on August 7 and the solar eclipse on August 21)...

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  4. Salut tim
    C'est dure de dire quand la baisse va débuter
    On peut encore monter je pense avec l'argent de la féd
    Une question
    Quel sera l'élément déclencheur de la futur baisse. ???

    Salut joe
    La baisse de la phase 4 débute pour quand à ton avis ???

    Merci pour vos réponses et bon dimanche

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