So are you in the Eclipse path? Close? or like me, did you make the trip to the path? Yes, I am one of the idiots that drove to Dandridge TN so I would be close enough to the path, that it would be dark. I also will be doing a little motorcycle riding to detune, relax, refocus, and slow my life down. We all live busy lives these days, but since I retired I feel like I had so many people pulling me in so many directions, with so much negative information, that something had to give. I feel really bad that my older brother and I had some serious words with each other and that might take a life time to repair. So goes family. I’ve seen things the last month or two that will make me consider buying Long Term Care for myself. But, here I sit the night before the eclipse, drinking a beer, watching Major League Baseball playing on TV, at the Little League World Series the night before. First time ever and how cool is that?
The last two weeks on the stock market would make you think that the eclipse arrived early and put some voodoo bad mojo on us. Tomorrow is ecplise day, so let’s hope we get some magic and prices will return to the upside. To much red for me. So let’s look at the charts.
Last week the S&P 500 had 2 sell warnings already in effect. Monday they were canceled and I was hoping that was going to hold, but by Thursday, prices took a dump. Friday prices continue to fall. This looks like a bull flag forming to me, but some of long daily price bars seem a little aggressive. Volatility is negative and when you see those bars move that way, prices normally fall. DMI is also negative. So the near term looks grim, but I have seen these things turn on a dime. Monthly, the S&P 500 is still a buy.
The Small Cap is leading this market and it is leading it lower. The series of higher pivot lows and the uptrend support I showed you last week, did not hold last week. So now we start looking for the next pivot low for support. That new level is $1176. That’s another 20 points lower. Now we have 3 lower pivot highs which can be used to draw a short term down trend. That is not good news. It is really bad news and it could be are first indication that we could have a monthly sell by the end of August. I can tell you we are just 11 points from a monthly sell today. We need price to reverse very soon.
The International index is holding strong and is a bright spot on the market. Volatility is what i would call neutral. DMI is mixed. All the negatives in our markets, have stalled the bull flag breakout that I was expecting here. Target is still $71.
Bonds just continue to grind ever so slowly higher. Volatility is positive. DMI is mixed. The next time Bonds fires a monthly buy and I do not take it, I’ll get someone to kick me. being 25% invested in Bonds would have slowed my recent two weeks worht of losses. Once again, I live and learn.
Conclusion: The Small Cap needs to stop going lower, period. It is having a dragging affect on the rest of the indexes. Without a turn soon, we are going to see some monhtly sell signals soon. I hope you all get to see the eclipse tomorrow. Pretty much a once in lifetime event for most of us. This will be my second, the first being March 7, 1970, so I consider myself extremly lucky to be able to catch this one, August 21, 2017.
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